In a cabinet decision Uttrakhand government  lowered VAT from 12.5 per cent to 4 per cent on fibre and particle boards made from eucalyptus and poplar trees. The major beneficiary from this decision is Greenply Industries Limited which is going for substantial expansion in its Rudrapur plant with an investment of Rs 250 crore.
Besides particles and fibre boards, the government had already lowered VAT on plywood boards to 4 percent.
After the last year’s recession that saw the demand falling by 40-50 percent, the industry based on agro-forestry particularly plywood is now expecting a robust growth in the wake of the real estate business showing signs of recovery.
In Uttarakhand, there are nearly 18-20 plywood industries, most of them in Kumaon region.Taking benefit of the concessional industrial package (CIP) that had offered slew of tax incentives, Archid Plywood, Rama Plywood, Shirdi Industries had set shops during the past two to four years in the key industrial estate Pantnagar and other areas of Kumaon region. Metro and Orium Sundram have set up manufacturing units at Roorkee in Garhwal region.
Welcoming the tax incentives, Anil Goel, who is also the President of Uttarakhand Plywood Manufacturers’ Association, said the government should also give special incentives and facilities to farmers to encourage the growth of eucalyptus and poplar trees. He said the industry is facing 30 to 50 percent of shortage in raw material.