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

Cement Makers Reaffirm Commitment to Sustainable Growth

Published

2 days ago

June 5, 2026

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World Environment Day spotlight on innovation and circularity

On World Environment Day, the Indian cement industry reiterated its commitment to supporting India’s climate ambitions through sustainable manufacturing, resource efficiency and the adoption of cleaner technologies.

The Cement Manufacturers’ Association (CMA) said the sector remains aligned with the Government of India’s Net Zero commitments and is accelerating efforts to reduce its environmental footprint while supporting the country’s infrastructure and development agenda.

Parth Jindal, President, CMA and Managing Director, JSW Cement, said the industry is increasingly adopting cleaner technologies, improving energy efficiency and expanding the use of alternative fuels and raw materials. He also highlighted the growing importance of circular economy practices, where industrial by-products and waste streams from one sector are utilised as resources in another.

“The Indian Cement Industry is aligned to the Government’s commitments on carbon mitigation and is accelerating the adoption of cleaner technologies, resource efficiency and circular economy practices while actively exploring the potential of Carbon Capture, Utilisation and Storage (CCUS) as a critical pathway for deep decarbonisation,” said Jindal.

He added that coprocessing industrial waste and by-products helps conserve natural resources, reduce disposal requirements and lower the environmental footprint across multiple sectors.

According to Jindal, sustainability is no longer limited to manufacturing processes but is increasingly influencing investment decisions, innovation strategies and long-term growth plans within the industry.

Echoing similar views, Dr Raghavpat Singhania, Vice President, CMA and Managing Director, JK Cement, said sustainable development extends beyond emissions reduction and must also focus on responsible resource utilisation and waste minimisation.

“Sustainability in the built environment cannot be measured by emissions alone. It is equally about how efficiently we use resources, how effectively we minimise waste and how responsibly we create the infrastructure that will serve future generations,” said Singhania.

He noted that the cement industry is advancing its sustainability agenda through greater resource efficiency, increased circularity, technological innovation and continuous improvements in manufacturing practices. As a key contributor to India’s infrastructure development, the sector has a critical role to play in balancing economic growth with environmental responsibility.

On the occasion of World Environment Day, industry leaders reaffirmed their commitment to supporting India’s climate goals while delivering the materials required for resilient, durable and sustainable infrastructure.

Concrete

Building a Greener Future Together

Published

2 days ago

June 4, 2026

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Environmental sustainability requires immediate action, not just long-term commitments and discussions. Recycling, circular economy practices, and technology-driven waste management can help industries reduce environmental impact while supporting sustainable growth.

Author: Jignesh Kundaria, Director and CEO, Fornnax Technology

World Environment Day serves as an important reminder that environmental sustainability can no longer remain confined to discussions, reports, or long-term commitments. The environmental challenges facing the world today demand immediate, measurable, and collective action. Across industries and communities, waste generation continues to outpace our ability to process it responsibly, placing increasing pressure on ecosystems, natural resources, public health, and the well-being of future generations.

One of the most significant shifts required today is a change in how society perceives waste. Rather than being viewed as a material to be discarded, waste must be recognised as a valuable resource that can contribute to both economic growth and environmental protection when managed through the right technologies and systems. This mindset forms the foundation of the circular economy model that countries across the world are increasingly adopting to reduce landfill dependence, recover valuable materials, and create more sustainable industrial ecosystems.

India has made meaningful progress in strengthening awareness around sustainability, recycling, and environmental responsibility over the past decade. Significant efforts are being made to formalise the recycling sector through improved infrastructure, technology adoption, policy implementation, and broader stakeholder participation. These developments are creating a stronger foundation for responsible waste management and resource recovery across the country.

However, achieving long-term environmental impact requires collaboration from all stakeholders. Industries, policymakers, technology providers, and communities must work together with greater accountability to strengthen recycling ecosystems, encourage responsible waste management practices, and create sustainable outcomes through consistent execution rather than temporary interventions.

As someone closely associated with the recycling industry, I firmly believe that technology will play a decisive role in addressing future environmental challenges. Advanced recycling systems have the potential to recover valuable resources, reduce pollution, minimise landfill burdens, and conserve energy, creating a more sustainable future for generations to come. This belief is deeply reflected in Fornnax’s motto, “Committed to Create a Green Future,” which embodies our commitment to building long-term environmental value through innovation and responsible action.

At the same time, technology alone cannot deliver meaningful change. Real progress requires intent, awareness, participation, and a shared sense of responsibility. Sustainable development can only be achieved when innovation is supported by collective action and a genuine commitment to environmental stewardship.

On this World Environment Day, let us move beyond conversations and take meaningful steps towards creating a cleaner, greener, and more sustainable planet. By embracing innovation, strengthening recycling ecosystems, and acting responsibly today, we can create lasting environmental impact and secure a better future for generations to come.

Concrete

Dalmia Bharat Acquires Jaiprakash Associates Cement Assets for ₹2,850 Crore

Published

2 weeks ago

May 25, 2026

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Dalmia Cement executed a Business Transfer Agreement with Jaiprakash Associates and Adani Infra, to acquire 5.2 MnTPA of cement capacity across Madhya Pradesh and Uttar Pradesh.

Dalmia Cement (Bharat) announced on May 22, 2026 that it had signed a Business Transfer Agreement with Jaiprakash Associates Limited and Adani Infra (India) Limited for the acquisition of cement plants located at Rewa in Madhya Pradesh and Churk, Chunar and Sadwa in Uttar Pradesh. The deal was struck at an enterprise value of ₹2,850 crore and is expected to close within two weeks of execution.

The acquired assets from Jaiprakash Associates include 5.2 MnTPA of cement capacity and 3.3 MnTPA of clinker capacity. The package also covers 99 MW of thermal power capacity and railway sidings at Rewa, Chunar, and a common siding at Churk. This infrastructure gives the acquisition immediate operational utility beyond just production tonnage.

The transaction has a long backstory. Dalmia Cement had originally entered into a framework agreement with Jaiprakash Associates in December 2022, covering the sale of these business assets along with a long-term clinker supply arrangement. However, before the deal could be completed, Jaiprakash Associates was admitted to insolvency proceedings under the Insolvency and Bankruptcy Code. The earlier agreements could not be consummated as a result.

In an official statement, Puneet Dalmia, Managing Director & CEO, Dalmia Bharat, said, “I am very excited about addition of these assets in our portfolio. This serves as a great strategic fit for Dalmia. It helps us move forward in our journey to be a pan India player and provide a strong head start to serve the high potential markets in Central region. I am optimistic that the expansion potential of these assets along with close proximity with Dalmia’s captive mines will help us create a capacity hub for the future”.

Following the approval of Adani Group’s resolution plan for Jaiprakash Associates under the IBC framework, Dalmia approached the new management to revive discussions. The fresh Business Transfer Agreement was executed to settle all pending disputes, legal proceedings, and arbitration matters arising from the original framework agreement with Jaiprakash Associates.

Expanding market reach

Dalmia added, “Our familiarity with these assets under the earlier tolling arrangement gives us a deep understanding of the facilities and helps us establish strong connect with channel partners and vendors. We believe that this will help us in faster ramp up of capacities and quicker inroads into the market. As we look forward, I am very confident that we will be able to leverage the strengths of Dalmia to operate these assets in a manner where we can maximise value creation for all our stakeholders.”

With the addition of these plants, Dalmia Bharat’s total installed cement capacity will rise to 54.7 MnTPA upon consummation. The company has further expansion projects underway at Belgaum, Pune, and Kadapa, which are expected to take overall capacity to 66.7 MnTPA by Q2 to Q3 FY28.

The Central India location of the Jaiprakash Associates plants gives Dalmia Bharat faster access to markets in Madhya Pradesh and Uttar Pradesh than a greenfield build would have allowed. The company also cited debottlenecking and brownfield expansion as near-term opportunities at the acquired sites. Dalmia Bharat said the assets were expected to contribute positively to EBITDA and overall returns, given the pricing environment in the region and the company’s cost structure.