Taxing time for MP's tile makers

The Mangalore roofing tile makers of Madhya Pradesh are once again in trouble.

The state has 40 manufacturing units of Mangalore pattern roofing tiles and most of them are in Balaghat and Bagra Tawa, while the rest are scattered in Indore, Ujjain, Seoni, Jabalpur and Dabra.

There are at least 3,500-4,000 employees from the backward classes who toil in these units. The industry is seasonal in nature and is heavily taxed.

There was some respite from taxation for about two months when state government had decided to withdraw the 4 percent commercial tax on Mangalore roofing tile manufacturing firms with effect from March 2003.

"The new government has re-imposed the tax with effect from June 2004. This will not only increase the cost of production, but also force labourers to migrate," said Dalchand Chauradia, president of Balaghat Chambers of Commerce and Industry.

"These units are labour-intensive and should remain under zero per cent tax slab," he said.

Any Mangalore pattern roofing tile manufacturing SSI unit produces 50-60 lakh tiles (15,000-20,000 tiles per day) in every season, which begins from November and ends during the month of June.

"The tax rate is zero per cent in Gujarat and Karnataka and we are facing intense competition from them," a manufacturer told Business Standard on condition of anonymity.

The number of units, according to industry owners, is declining. "We do not have alternate source of fuel, we only use rice husk to bake tiles. The cost of rice husk is now Rs 70 per quintal, up Rs 10 per quintal from the last year," he said.

The problem does not end there. The royalty levied on Mangalore pattern roofing tiles is also unusually high.

The state government officials levy a royalty of Rs 15 per cubic metre, while other states levy an annual royalty of Rs 10,000. The corporate tax levied on these units by local bodies is also exorbitant (Rs 15,000 and more depending upon the size of the unit).

The members of these units have recently met the department of industry officials and the minister for industries, Kailash Chawla, to put their woes across.

The members have said the commodity (tiles) is not so important that they could observe a strike like Rice and Dal traders did in the recent past to get a tax exemption from the state government.

"We have been given an assurance only but nothing has been done so far." The minister could not be contacted.