- In order to help the MSME units in the soap industry having a turnover of up to ₹100 crore, we hereby urge you to include them in the 5 per cent slab: GSSDMA Chairman Naresh Jain
- Special subsidies and working capital support for MSMEs, enhanced rebates under RoDTEP/SEZ schemes to boost exports
NE BUSINESS BUREAU
AHMEDABAD, SEPT 1
The Gujarat Small Scale Detergent Manufacturers Association (GSSDMA), representing over 500 members, has on Monday sought a reduction of the Goods and Services Tax (GST) rates on soaps to 5 per cent from the current 18 per cent, including a slew of measures, saying that lowering rates would boost the detergent and soap industry in line with the vision of “Make in India” and “Atmanirbhar Bharat.”
In a letter to the Union Finance Minister Nirmala Sitharaman, who is heading the GST rationalisation panel, GSSDMA Chairman Naresh Jain pointed out that “Prime Minister Narendra Modi had announced the GST rationalisation. In order to help the MSME units in the soap industry having a turnover of up to ₹100 crore, we hereby urge you to include them in the 5 per cent slab.”
According to Naresh Jain, Chairman of the Association, “The detergent industry in India is currently valued at around ₹ 0,000 crore and is growing steadily at a CAGR of 7%. With India being one of the largest consumer markets globally, this sector is strategically positioned to emerge as a global manufacturing hub under the Make in India and Atmanirbhar Bharat initiatives.”
“At present, the industry is facing several critical challenges. High GST rates and an inverted duty structure are creating severe working capital and competitiveness issues for MSME manufacturers. Products under HSN 3401 (soaps and organic surface-active products) and HSN 3402 (detergent powders, cakes, liquids, etc.) are currently taxed at 18%. Additionally, high import duties on key raw materials such as LAB, fatty alcohols, surfactants, and packaging materials have escalated production costs. Multiple overlapping compliance requirements further add to the burden on small and medium enterprises,” he added.
To address these concerns, the Association Chairman Jain put forth some demands and said, “Reducing the GST rate from 18% to 5% could significantly expand the industry’s potential. Such a measure could help the market grow to over ₹1,00,000 crore, improve affordability, increase penetration of quality Indian-made detergents into rural markets, and enable MSME manufacturers to introduce more eco-friendly formulations. It would also create large-scale employment opportunities, especially in states like Gujarat, where over 500 MSMEs are already generating jobs for unskilled labour. Moreover, the industry’s CAGR growth could rise from the current 7% to over 10%.”
Key demands
The Association has put forward the following key demands, which include reduction of GST to 5% on HSN 3401 and 3402 products, special subsidies and working capital support for MSMEs, enhanced rebates under RoDTEP/SEZ schemes to boost exports, and the introduction of a single-window clearance system to ease compliance and eliminate red tape.
With the right policy support, the detergent and soap sector have the potential to cross ₹ 1,00,000 crore turnovers, generate large-scale employment, deliver affordable and eco-friendly hygiene products to every Indian household, and strengthen India’s position as a leading global exporter of essential hygiene products.
