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Government, GST Council to address distress in the Indian export sector

The Central government and the Goods and Services Tax (GST) Council, will meet later this month to address the distress in India’s export sector on account of the US withdrawing preferential trade terms, and an ongoing global slowdown by tweaking the GST rate on products that figure heavily in India’s export basket. There is a strong demand for reducing GST on auto parts and some textile goods, which the Central government is likely to support. It will also be pitching for a single authority to process GST refunds.

While some auto parts are currently taxed at 18 per cent, others are taxed at 28 per cent. The Automobile Component Manufacturers Association has been demanding that all auto parts be uniformly taxed at 18 per cent for some time. The auto-components industry accounts for 2.3 per cent of India’s Gross Domestic Product (GDP) and employs as many as 1.5 million people directly and indirectly each. There is also a move to reduce GST on some textile product lines which are now taxed at 18 per cent to 12 per cent, as well as on finishing agents such as dyes, etc., used by the textile industry in order to help the sector which earned about $38 billion in 2018.

The centre may also make a case before the Council for the need to bring in at least some petroleum products into the GST ambit.

 
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