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Finmin wants auto cos to reduce costs, royalty payments rather than seek GST cuts English.Lokmat.com

Finmin wants auto cos to reduce costs, royalty payments rather than seek GST cuts

New Delhi, Sep 17 In a setback to the automobile industry looking for a reduction in GST rates to ...
Finmin wants auto cos to reduce costs, royalty payments rather than seek GST cuts

New Delhi, Sep 17 In a setback to the automobile industry looking for a reduction in GST rates to help tide over the present crisis, the finance ministry has said current taxes on the sector were lower than pre-GST times and the industry should rather look at reducing their costs by cutting down the royalty payments to parent companies abroad instead of asking the government to change the GST rates.

Top sources in the finance ministry said that India's tax policy on automobiles has been quite consistent for the last three decades now in the form of allowing foreign investment and incentivising domestic manufacturing by providing reasonable protection from imports.

"The industry has on its part delivered. It has contributed by way of large investments and employment. All of a sudden, dissent in some quarters on tax rates on automobile is surprising. In fact these companies should cut down their costs of manufacturing by cutting down the royalty payments to their parent companies abroad instead of asking the government to reduce GST," finance ministry sources said.

Finance Minister Nirmala Sitharaman's recent statement at an industry event suggesting that concerns of the industry in GST would be taken to the GST Council, fuelled speculation that rates on automobiles may be reduced. Minister of Heavy Industries and Public Enterprises Prakash Javadekar early this month also said the central government is looking into the automobile industry's recommendation for a reduction in Goods and Services Tax

( With inputs from IANS )

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