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Reuters
NEW DELHI
India’s goods and services tax (GST) panel is unlikely to approve lowering the tax for the auto and allied components sector this week, as a study has warned of major revenue losses, two government officials said.
A government study, attached to the agenda of a Sept. 20 GST panel meeting, has said the total annual revenue loss could be as much as 500 billion rupees ($6.95 billion), if the panel decided to lower tax rates for the auto sector to 18% from 28%.
Meanwhile, state officials in Kerala, Punjab and West Bengal say they are also opposed to any cut in tax rates in the autos sector, or even consumer goods, because of lacklustre tax collections this fiscal year.
In the April-July period, total tax revenues of 20 Indian states fell 7% to 4.9 trillion rupees compared with the same period last year. Some states were particularly hard hit, with data showing Andhra Pradesh, Rajasthan and Punjab tax collections plunged 59%, 35.5% and 12.5%, respectively.
“I will oppose any reduction for the simple reason that it won’t be revenue neutral,” said Thomas Isaac, finance minister of the southern state of Kerala.
The auto sector, which has been reeling from the worst slump in nearly two decades, has pushed for a lowering of tax rates at the Sept. 20 GST panel meeting.
NEW DELHI
India’s goods and services tax (GST) panel is unlikely to approve lowering the tax for the auto and allied components sector this week, as a study has warned of major revenue losses, two government officials said.
A government study, attached to the agenda of a Sept. 20 GST panel meeting, has said the total annual revenue loss could be as much as 500 billion rupees ($6.95 billion), if the panel decided to lower tax rates for the auto sector to 18% from 28%.
Meanwhile, state officials in Kerala, Punjab and West Bengal say they are also opposed to any cut in tax rates in the autos sector, or even consumer goods, because of lacklustre tax collections this fiscal year.
In the April-July period, total tax revenues of 20 Indian states fell 7% to 4.9 trillion rupees compared with the same period last year. Some states were particularly hard hit, with data showing Andhra Pradesh, Rajasthan and Punjab tax collections plunged 59%, 35.5% and 12.5%, respectively.
“I will oppose any reduction for the simple reason that it won’t be revenue neutral,” said Thomas Isaac, finance minister of the southern state of Kerala.
The auto sector, which has been reeling from the worst slump in nearly two decades, has pushed for a lowering of tax rates at the Sept. 20 GST panel meeting.
