Ahead of GST rollout, Gurgaon-Manesar automobile hub tense
Ahead of GST's rollout, the automobile hub of Gurgaon-Manesar is alive with anxiety. Till now, many small-time suppliers haven't been brought on board yet. Most large traders have prepared and are ready to migrate, but things aren't easy for smaller vendors. "We have been told they may not be able to do invoicing for 10-15 days," said Jagdeep Singh Rangar of Stork Rubber Products.
It's not just the smaller firms
Stork, a small-scale supplier, claims a turnaround of Rs. 80cr. It says it is stocking up "to avoid disruptions in production". But the Rs. 9,500cr Rico Auto, which gets materials from several small-time traders, is worried too. "(Many) suppliers from smaller towns like Muzaffarnagar and Ludhiana…aren't aware of what to do, and how to do it," says chairman Arvind Kapur.
The scene is similar everywhere
About 20% of the vendors of Sona Group aren't GST-compliant yet. As a result, CFO Vivek Vikram Singh the company is expecting an additional Rs. 1cr working capital for Rs. 50cr of sales. Meanwhile, 100 of the 700 sub-supplies are Sansera Engineering aren't GST-ready. Apart from disruptions in supplies, the company is expecting "issues on the compliance side when it comes to smaller suppliers".
Bigger firms should 'hand-hold' smaller ones to ensure smooth transition
The regional automobile industry employs about three lakh workers, according to Vinnie Mehta, director-general of Automotive Component Manufacturers Association. Mehta says bigger firms should "hand-hold smaller suppliers" to ensure the entire network stays safe.
