Baggase Particle Boards has attracted 12% GST, where as its close rival product wood particle board comes under the highest GST slab of 28%. The situation is helping Baggase Particle board segment to gain its market share among small furniture makers, who have been using wood particle boards. During our recent survey in July among small modular furniture makers in Delhi, UP, Himachal Pradesh, Mumbai and Pune finds that many small processors for furniture category are taking composition scheme of Rs. 75 lakhs under GST so they are looking for those materials which is being levied under lower GST rates, where the Baggase Particle Board is emerging as a suitable choice for them.
During the survey, these small furniture makers expressed that Particle Boards are significant raw material for their business which contribute about 55 % of their total input cost. Hence if they are small processors and choose to be under composition scheme in GST then using bagasse particle board is better. The furniture manufacturers are very much concerned about the calculations and mid level furniture producers who sell their products to retail markets are finding the going tough after GST regime. On the contrary, the unorganised and small/micro furniture makers are happy with improving rural housing demand and government initiative of affordable housing plan as well rising demand of computer table, TV stands etc. Experts and particle board makers are of view that there is great potential for baggase boards in small and cheap furniture category as it contribute to 60 % market furniture demand.
Presently, India has approximately 4000 cubic meter per day Baggase Particle board manufacturing facility, which is almost equivalent to wood particle boards but due to unstable supply of raw material, these sector is unable to achieve its capacity. If Baggase sector can manage sustainable procurement model of raw material, they will gain over wood in GST regime.