GST Rate Fall Down On Auto And Other Products On Political Call

In New Delhi, it is decided by the politicians to reduce goods and services tax (GST) on automobiles and other products, even as finance ministry officials remain doubtful of the utility of curtsy to the clamor for a rate cut. They highlighted both - lack of fiscal space and doubts whether regulation will really address the causes for the slowdown in the sectors.
Around Rs. 15,000 crores a month to Rs. 10,000 - 11,000 crores, it is down from the collections of automobiles, and the remittance pool does not have plentiful compilation to funded through a cuss on cars, tobacco and soft drinks - to pay states if any GST "shortfall". The Centre has to compensate those that do not see 14% or higher annual GST growth for five years it is mentioned under the agreement with states.

Collections have a long way this fiscal grown at over 6% against the asking rate of 13%.
Though the auto lobby has been the most vocal in its demand, the finance ministry has so far refused to cut the tariff, which adds up to 43%, including a 15% cuss on mid-sized and large cars above the 28% tax. Industry representatives have informed to the finance ministry that collections may driblet further as they see a continuous sharper slowdown in coming months.

Nitin Gadkari – transport and MSME Minister, however, backed the auto sector and advised that he will seek a "package", with junior finance minister Anurag Thakur implied that the vocal auto porch should take up the issue with the states - equal partners in the GST decision-making process. BJP-ruled most of the states, state FMs will take a lead from the Centre.

Finance ministry officials see the GST Council meeting on September 20 as the last window for a rate reduction, ahead of the festive season when cars and durables sales get a boost. But they find little merit in the demand with some of them confessing that consumers are extending purchases due to weak assumptions on their income growth in the coming months.
Besides this they said, rate cuts in the past have generated scant results, and point to the involvement of the real estate sector where the tariff was noticeably incised ahead of the general elections. "A spending boost for infrastructure and other sectors will have more impact than a reduction in GST," said an official.

By – Tripti Varun
Content – https://economictimes.indiatimes.com/news/economy/policy/gst-rate-cut-on-auto-other-products-to-be-political-call/articleshow/71043374.cms