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     We appreciate the Central Government’s decision to take cognisance of the difficulties faced by the textile sector and reduce the rate of job works to five per cent.

      Another issue is in regard to the auto industry. It is to be noted that the auto ancillary parts in Tamil Nadu are mainly supplied to the Original Equipment Manufacturers (OEM) for which the rate of tax under VAT was 5 per cent as industrial inputs and most of these ancillary units were earlier out of the purview of Central Excise. However, with the implementation of GST, these units have to pay highest rate of 28 per cent. It has now been brought to our notice that this has caused huge blockage of working capital. Further, the auto components, being intermediate goods, need not be taxed at 28 per cent and may be reduced to 18 per cent. Further, the Replacement Market is intrinsically linked with the Services sector and can't subsist on its own. That being the case, the rate of tax would be 18 per cent in the case of bundled supplies. Hence, reducing the rates of tax on auto components to 18 per cent would not impinge on revenue collection. We, therefore, urge that the rate of automobile components may be reduced to18 per cent.