Economy & Market

GST regime is full of challenges and needs resilience

Published

9 years ago

September 30, 2017

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Endorsed as "Good & Simple Tax", Amman Devralia, Executive Director, KHD Humboldt Wedag, has a high expectation that it will buoy the Indian economy and bring the informal sector into the formal sector. In an interview with Nitin Madkaikar, Devralia reiterates its success will depend on the readiness of the entire supply chain (suppliers, distributors, retailers, logistics partners etc.) to adopt the regime. Is the GST regime conducive as it described before the launch on July 1, 2017?
GST has been endorsed as "Good and Simple Tax". ‘Good’ because it minimises the cascading effect of taxes (i.e., levying of tax on things that have already been taxed), thereby reducing the cost of doing business, and ‘Simple’ as it replaces multitude of indirect taxes, thereby increasing ease-of-doing business.
There are huge expectations that the biggest indirect tax reform will boost the Indian economy in the long run and huge shift will be seen from unorganised to organised sector. However, a period of three months is too short to come to a conclusion.
The fundamental aspect of GST is the seamless flow of input tax credit along the entire value chain, wherein credit of taxes paid on inputs at each stage is available in the subsequent stage of value addition, thereby making GST essentially a tax only on value addition at each stage. The ability to claim input tax credit under the GST regime depends on timely compliance and matching of data filed by the parties along the entire supply chain. Any lapse on part of the supplier may lead to denial of input tax credit in the hands of the recipient, thereby casting an additional burden on the recipient to ensure timely compliance by the supplier. As a safeguard, two-stage payment mechanism is being followed by the recipient wherein the basic portion is paid upfront to the supplier and tax portion only after reconciliation of data filed in the respective GST returns.
Some of the concerns includes:
a) readiness of the entire supply chain;
b) un-interrupted connectivity to GST Network;
c) increased level of compliance and reporting on a monthly basis. Reports say that three returns have to be filed each month. Is this posing any operational problem/s in the supply chain?
Large entities were filing at-least three returns each month under different indirect tax laws (i.e. excise return, first stage dealer return, VAT and CST return) under the erstwhile tax regime as well. The real pain area under the GST regime as compared to the erstwhile tax regime is the level of compliance and reporting required to be done on a monthly basis. Entities are required to enter invoice level details in the monthly GST returns, which is a cumbersome process. Smaller entities without the required infrastructure are finding it difficult to manually enter invoice level details and large entities are facing infrastructural bottlenecks in uploading huge volume of data. In some ways, the government has outsourced the tax compliance to businesses in order to ensure compliance along the entire supply chain. Are you satisfied with the procedures that came into force after July 1?
The design of a single IT platform – GST Network – as a common interface between the tax payers and tax authorities for the core functions of administration (like, registration, filing and processing of returns, payments and refunds), is definitely a step towards paperless regime. However, provisions with respect to self-invoicing and payment vouchers for inward supplies from unregistered vendors, issuance of advance receipt vouchers on receipt of advances from customers, etc., entails additional paper work. Further, the ongoing glitches in the GST Network has been disappointing and raises doubts about the operational capacity of the GST Network, which is the foundation for paperless regime. The three months being seasonally weak for the industry, what was the impact on business compared with the past weak seasons?
As per industry reports, cement production witnessed a decline of 3.9 per cent in Q1FY17. Cement production stood at 72.67 million tonne (MT) in Q1FY17 as compared to 75.7 MT in Q1FY16. The decline was due to low inventory addition in the real estate and housing sector (accounting for about two-third of the total cement consumption in India), as the regulations and compliances under newly implemented Real Estate (Regulation and Development) Act, 2016 – RERA, made the developers cautious. With RERA implementation to be completed by the end of Q2FY17, clarity on the impact of GST on the real estate and housing sector coupled with government’s initiatives towards building affordable housing should eventually drive the demand for cement from the real estate and housing sector. Also, public infrastructure development lead by execution of smart cities and national highways projects across the country should drive the demand for cement from the infrastructure and construction sector in the next quarters. Has the need for working capital risen, given that refunds are still locked with exchequer?
Yes, under the erstwhile tax regime, exporters enjoyed upfront tax exemption on purchases against concessional tax forms, which is not available under the GST regime. Under the GST regime, GST paid on inward supplies is required to be claimed as refund by the exporters. However, due to glitches in the GST Network, the deadline for filing GST returns for July 2017 (the first month under the GST regime) has been extended twice, with GSTR-3 now required to be filed as late as November 10, 2017. The extension in filing GST returns for the first and therefore subsequent months means delay in processing of refunds by the authorities thereby increasing the requirement for additional working capital. Do you think GST regime will attract investment in your end use industry?
The demand for cement is driven by real estate and housing sector, accounting for about two-third of the total cement consumption in India. The other major consumers of cement include infrastructure, commercial construction and industrial construction. Given the government’s initiatives towards building affordable housing and public infrastructure development, GST regime will certainly attract investment in the real estate and construction sector. Further, bringing the real estate under the ambit of GST can boost the investment in the sector. Is there any other information you wish to share.
The GST regime aims to widen the tax base by bringing the informal sector under the ambit of formal economy resulting in higher tax revenues for the exchequer, gradually allowing a move towards fewer slabs and lower GST rate. The transition has just started and the ride to make GST a "Good and Simple Tax" will be long and full of challenges requiring resilience on part of government and businesses. The successful implementation of GST will certainly drive the Indian economy offering opportunities for growth across sectors.

Concrete

Wonder Cement appoints Mahesh Singh as VP Corporate Brand Communication

Published

1 week ago

October 9, 2026

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Singh brings 20+ years of brand and marketing experience, and will lead integrated corporate brand communication initiatives at Wonder Cement

New Delhi

Wonder Cement, a leading cement manufacturer, has appointed Mahesh Singh as Vice President – Corporate Brand Communication. In his new role, he will oversee corporate brand strategy and communication, including digital and performance marketing, public relations, trade, events, exhibitions, sports and experiential marketing.

Singh brings over two decades of experience across marketing and communications, with roles spanning the automotive industry, agencies and entrepreneurship. He spent more than a decade with Honda Motorcycle & Scooter India, working across integrated communication, media, digital, retail and consumer engagement. His stint also included helping build the company’s digital marketing capabilities.

He moved to dentsu X India as Vice President – Strategy & Planning, working across categories such as automotive, auto components, electric vehicles, FMCG, consumer electronics, BFSI, apparel and brand consulting. His responsibilities included media and marketing strategy, product launches, content, performance marketing and consumer activations.

Singh subsequently took an entrepreneurial route with Radiant Brands before joining Shriram Ltd (SPR Autotech) as Head – Marketing & Communications. There, his remit included brand and corporate strategy, communications, PR and ORM, retail identity, loyalty programmes and events.

At Wonder Cement, Singh will be responsible for bringing together the company’s corporate brand communication initiatives across digital, performance marketing, PR, trade, sports and experiential platforms. The role will focus on creating an integrated approach to communication across consumers, trade partners and other key stakeholders.

The appointment brings to Wonder Cement a marketer whose career has spanned the brand, agency and entrepreneurial sides of the communications ecosystem.

Wonder Cement, part of the RK Group, is a cement manufacturer with roots in Rajasthan and a focus on quality, trust and transparency. The company has grown to six manufacturing plants, and a cement capacity of 21.5 MTPA. With more than 2,000 employees and a network of over 5,000 dealers, its operations span manufacturing, distribution and customer engagement, with a focus on consistent product quality and efficient execution.

Concrete

JSW Cement commissions additional 1 MTPA grinding unit at Nagaur

Published

1 week ago

October 8, 2026

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With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA,
Mumbai

JSW Cement, one of India’s leading green cement producers and part of the diversified JSW Group, today announced the successful commissioning of an additional 1.00 MTPA cement grinding unit at Nagaur, Rajasthan. The commissioning marks another significant milestone in the Company’s growth strategy.

With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA, while its total clinker manufacturing capacity, including clinker capacity at its joint venture, JSW Cement FZC, stands at 9.74 MTPA.

JSW Cement had commenced operations in North India in March 2026 with the Nagaur Integrated Plant, comprising a 3.30 MTPA clinkerisation unit and 2.50 MTPA cement grinding unit. With the commissioning of the additional 1.00 MTPA cement grinding unit, the plant’s total cement grinding capacity has increased to 3.50 MTPA, enhancing the company’s ability to cater to the growing cement demand across Rajasthan, Haryana, Punjab and the National Capital Region (NCR). The expansion has been funded through a strategic mix of equity and long-term debt.

During the quarter ended 30th September 2026, JSW Cement has also commissioned the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) at the Nagaur Integrated Plant.

Nilesh Narwekar, CEO, JSW Cement, said: “The commissioning of additional 1.00 MTPA grinding capacity at Nagaur is a key strategic priority for us and will accelerate JSW Cement’s expansion into North India. We look forward to servicing the growing needs of the region and contributing to the economic growth of Rajasthan, Haryana, Punjab and the NCR area. I am delighted to share that the company has commissioned this grinding unit within the expected timeline, showcasing our project execution capabilities. Further, the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) are expected to substantially reduce our production costs going forward.”

Concrete

UltraTech becomes first Indian cement firm to cross 2 GW green energy

Published

1 week ago

October 7, 2026

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UltraTech Cement has crossed 2 GW of captive green energy capacity, with renewables and waste heat recovery meeting 48 per cent of its power needs.

Mumbai

UltraTech Cement Limited has surpassed 2 GW of installed green energy capacity for captive use, becoming the first cement company in India to achieve the milestone. The Aditya Birla Group company commissioned 116.55 MW of wind capacity at its Inter-State Transmission System-connected wind-solar hybrid project in Barmer, Rajasthan, along with 10 MW of Waste Heat Recovery System capacity at Sarlanagar Cement Works in Karnataka.

With these additions, UltraTech’s cumulative installed green energy capacity has reached 2,024 MW. This includes 1,580 MW of renewable energy capacity and 444 MW of waste heat recovery capacity, together meeting around 48 per cent of the company’s current power requirements.

The company said the milestone reflects the progress of its long-term energy transition strategy. In FY27 so far, nearly one-third of UltraTech’s 76 manufacturing units in India have maintained green energy utilisation above 50 per cent of their electricity requirements, while five units have crossed 95 per cent.

K C Jhanwar, Managing Director, UltraTech Cement Limited, said, “Crossing the 2 GW green energy milestone is the result of a strategy we have pursued consistently over the past decade. Cement is an energy-intensive, hard-to-abate sector, and showing that reliability and growth can go hand in hand with a rapid shift to green energy sets a benchmark for the industry. With nearly half of our power needs now met through green energy, we are significantly less exposed to fossil fuel supply constraints and power price volatility. As we scale up renewables, waste heat recovery and battery storage across our operations, we are building an energy foundation for stable, long-term growth.”

UltraTech commissioned 430 MW of green energy capacity in FY26 and continues to expand its renewable energy and waste heat recovery portfolio.

The company is also progressively integrating Battery Energy Storage Systems across its operations to improve renewable energy utilisation and supply reliability.

In 2025, UltraTech operationalised what it described as India’s first on-site hybrid round-the-clock renewable energy project at Sewagram Cement Works in Gujarat. The project combines solar, wind and battery storage.

As part of its decarbonisation strategy, UltraTech said it has not invested in new captive thermal power capacity for either greenfield projects or brownfield expansions at its integrated units for more than a decade.

The company said its expanding green energy portfolio is helping reduce dependence on conventional grid electricity and fossil fuel-based power, while lowering exposure to fluctuations in coal and electricity prices.

UltraTech aims to increase green energy’s share in its total power mix to 85 per cent by 2030. As a member of RE100, it has also committed to meeting 100 per cent of its electricity requirement through renewable sources by 2050.

UltraTech Cement, the cement flagship of the Aditya Birla Group, has a total grey cement capacity of 210.1 MTPA and white cement and putty capacity of 3.5 MTPA. The company is also a signatory to the GCCA Climate Ambition 2050 and has committed to the GCCA Net Zero Concrete roadmap.