The demand for timber and timber products including plywood and laminates has been hit by some 40 percent, with plywood coming under 28 percent taxation.
While monsoon is the lean season for timber merchants as demand usually dips, industry players say that it has further plunged this year, against the same period last year. The decline in demand is mainly driven by increase in price of timber as well as plywood.
"After implementation of GST, the tax on plywood has become 28 percent. The increase in tax has led to tremendous confusion among customers who are deferring their purchases. Demand has been affected significantly and we hope it recovers soon," said Manish Shah, a plywood trader.