Analysing GST impact on fertiliser industry

In a special series "Hello GST", CNBC-TV18's Menaka Doshi decodes the benefits of Goods and Services Tax (GST) for different industries. Today's sectoral pick is fertilizers.The two raw materials needed to manufacture fertilisers include naptha and natural gas, of which naptha is not included in the bill, says V Lakshmikumaran, Managing Partner, Lakshmikumaran and Sridharan.Speaking to CNBC-TV18, he says the current excise duty is negligible. However, GST rate could rise to 12 percent (as proposed) further burdening the industry. This is going to be a huge rise in cost, he adds.Furthermore, higher taxes would mean higher subsidies and there is always an imbalance between the actual re-imbursements and claims made, Lakshmikumaran says, adding, disputes and delays in paying subsidy would interrupt the cashflow in the industry.Transcript to follow