Auto parts manufacturers seek reduction in GST on spare parts | Ludhiana News

Ludhiana: Auto parts manufacturing industry of the city is all praise for the central government on the proposal to reduce GST by 10% on automotive sector, especially two-wheelers, and for cars from 28% to 18%. But at the same time businessmen are demanding that the GST on auto parts should be reduced by 10%, which is their long pending demand and the high rate of 28% GST is causing huge problems for them like high cost of production. Besides, a huge amount of money also gets stuck in GST refunds with the taxation department.
Speaking to TOI, Gurpargat Singh Kahlon, president of the Auto Parts Manufacturers Association (APMA), said, “Recently a proposal has been given by several Union ministers to reduce 28% GST applicable on automotive sector by 10%, which means that two-wheelers and four-wheelers will become cheaper and there might be surge in their demand. But it’s unfortunate that there has been no assurance from anyone on the reduction of GST on auto parts, which too is 28 percent and from 2017 we have been demanding its reduction as it is the highest slab under GST.”
Kahlon added, “Due to such high rate of tax not only our cost of production has risen sharply ever since it was imposed, but our investments also have increased in business. Over and above this huge amount of money also gets blocked as GST refund with the taxation department and we are unable to bear this financial burden. Therefore, we request the central government to not ignore the auto parts manufacturers and reduce GST on our industry as well along with the reduction on automobiles.”
According to OP Kapoor, general secretary of APMA, “Auto parts manufacturers of Punjab have been suffering for a long time, firstly due to demonetisation our industry suffered a severe blow. Later, when GST was imposed on us, we were kept in the highest slab of 28%, whereas there are some sectors where only 5% GST was levied. Combined with this the high rate of power and now the labour shortage are killing our industry. The only major relief which can prove to be a gamechanger for us is if the GST on our industry is reduced from 28% to 18%. With the 10% reduction there will be less capital involved and most importantly it will lead to huge reduction in the cost of auto parts, which will give a push to our industry. Therefore, we request the Centre and GST council to reduce GST on the auto parts as well in addition to reducing the same on automobiles.”
According to Nitin Sharma, another auto parts manufacturer, “I think along with reduction of GST on the auto parts by the centre government, our state government should also play its role in uplifting of the auto parts manufacturing industry. The most immediate relief which can be given to us by Punjab government is the reduction of rate of power to Rs. 5 per unit which currently is almost double. If both GST reduction of 10 percent and power tariff reduction are implemented then there will be significant boom in our industry”

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