Chennai: Chennai touted as a hub for automobiles, leather and manufacturing industry is losing the tag slowly post demonetisation. General Patters road, Pudupet, and Periamet the wholesale market of Chennai dealing spare parts and leather, have been witnessing a 40 per cent dip in business and frequent changes in tax, admit industry sources.
“In Chennai’s central district, the business is negative for the past two years. Tax related issues including VAT, service tax and the card swiping tax had affected the local business and the import of raw materials, unfinished goods from other countries and Indian states”, says Ravi Chordia, who owns a car designing showroom on Mount Road. The General Patters road, which deals with the motor spare parts industry, is undergoing turmoil since 2016 and now it is hit by more than 40 per cent due to demonetisation. “We are hoping that the implementation of Goods and Service Tax (GST) which promises uniform taxation across the country will bring in respite”, he added.
“General Patters road also caters to rural markets in Tamil Nadu. The weekly cash limit withdrawal for companies has affected the purchasing capacity of dealers and there is a deficit supply of spare parts to all tier two cities in TN,” said S. Kumar, who deals with two wheeler spare parts imported from Maharashtra. According to members associated with All India Skin and Hide Tanners association and Merchants Association, headquartered in Chennai, the cumulative annual growth rate of leather export Industry was about 8.55 percent (for a period of 5 years ending 2014), but in the past two years the export business from Tamil Nadu had been slipping due to various factors.
“Asian countries are providing tough competition in India and after this the leather traders started focusing on the domestic market by setting up retail outlets in Periamet and Vepery, but post demonetisation the domestic sales had also dipped by more than 40 per cent,” said Khaja Mohammad a trader into leather industry for more than two decades.
