Tractor input cost to go up
The Tractor Manufacturers’ Association (TMA) has said the proposed GST rate of 28 per cent for components will raise input costs by Rs 25,000 a tractor and impact farmers and agriculture alike. It has also urged the government to reduce the duty for all tractor components to 18 per cent from 28 per cent.
This anomaly is due to GST’s downward revision being limited to token components of a tractor wh­ile major aggregates such as engines, transmissions and other parts will continue to be levied at 28 per cent.
Tractors that hitherto had nil duty will now have a GST of 12 per cent. “Unfortunately, this has only been partially rolled out as of now and currently the increase in input cost stands at 25,000 per tractor,” said Mallika Srinivasan, chairperson and CEO at TAFE.
She said TMA is requesting the revenue departme­nt to reduce duty on all co­m­ponents of tractors like engines, transmission, axl­es, centre housing, front and rear tyres and tubes and other parts from 28 per cent to 18 per cent.
In addition to the above, while the transitional provisions in respect to stocks held at depots and dealerships are extended to all industries, the tractor industry with an embedded tax rate of 8 per cent, is not eligible for this relief just because tractors were in the exempted category till now.
Michael Gonsalves