GST to encourage local production of incense sticks

Sunday, 9 August,New Delhi: The incense sticks industry is eagerly waiting for the implementation of the Goods and Services Tax, which it feels will offer greater flexibility for the sector in terms of promoting local production.

“We are eagerly waiting for GST to be in place. This will help us in promoting local production. Currently to get excise benefit we cannot move the fragrances out of the place of production. But with GST in place it can be done,” world’s leading incense stick maker Cycle Agarbathi director Arjun Ranga told PTI.

At present, the company gets the incense sticks from low manufacturing bases like Odhisa and Bihar and get these transported to Mysore factory for mixing the frangrance.

“Transporting the sticks to our Mysore plant from locations like Bihar and Odhisa to put fragrance on the incense sticks and then distribute involves hassels, time and cost.

“Once GST is in place, we will have complete manufacturing in several locations,” Ranga said.

The impact for Cycle Agrarbathi will be 3-4% in net margin, company officials said.

India is largest incense stick maker and currently the export market for the sector is about Rs 450 crore.

The export sector is growing at 15-20% as demand is growing in a few Latin American countries, officials said adding the domestic demand is expanding at the rate of 3-4%.

The incense stick industry size is pegged at Rs 5,000 crore of which organised players account for about 50%.

Cigarette to FMCG major ITC Ltd had also forayed into incense stick market.