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Tariff hurdles to Indian industry
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Bikky Khosla | 25 Feb, 2014
The last week saw passing of the Interim Budget for 2014-15 and to no one's surprise it has nothing much to offer. The Budget is just for about four months and to enable the present government to carry on with its activities until a new government is formed after the elections. Not much was expected out of it, neither there was much scope for the finance minister to offer . . . positive side or negative side, there was no major surprise either way. If the targets set now cannot be achieved later nobody will be answerable . . . even if the ruling party is re-elected and misses a target, they could easily look for alibi like global slowdown or the US tapering.
The Budget, however, has come with some good steps -- which though look too little and too late -- for the manufacturing sector. First of all, I welcome the proposal to waive or rebate all taxes, Central and State, that go into an exported product. The state taxes blunt the competitiveness of different exports products to a great extent and therefore the Budget proposal can be termed positive. Second, the Budget cuts excise duty on capital goods (as well as on cars & two-wheelers and consumer durables). This decision would have some marginal positive impact in the short-term as the duty cut is applicable to June 30.
As far as the first point is concerned, I want to add that removing or at least streamlining the different tariffs imposed by most of our states on movement of goods across their borders is very important for improving the business environment in the country and our policy makers should stop turning a blind eye to this problem. No doubt it will be politically challenging but unless we do this, as China did 17 years ago to do away with these types of tariffs, it will not be possible for us to improve internal movements of goods for manufacturing within the country. Removing these taxes, which lead to inefficiencies in production, will also help enhance competitiveness of the industry.
I think GST needs to be implemented at the earlier. This will bring an end to dozens of taxes like central sales tax, state sales tax, entry tax, Octroi, CENVAT, etc. and, as a result, our businesses will not only get rid of the confusion created by the present tax regime with multiple authorities and different jurisdictions levying multiple taxes on different aspects of a business, but will also be able to reduce production costs in many cases. On the other hand, as GST will be easier to implement, this will in turn boost tax collection. So, the earlier the Centre and states come towards an agreement, the better it is for the Indian industry and the economy. The next government should press ahead with this objective.
I invite your opinions.
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GST
Harsh | Thu Feb 27 08:36:12 2014
Implement GST to boost domestic growth in manufacturing and also exports eventually.
suresh.n.sagar | Thu Feb 27 07:25:58 2014
addendum-gold import and usuage can be nation"s saving and increases gold reserves in the country
Introduction of GST
suresh.n.sagar | Thu Feb 27 07:21:59 2014
It is very important even to attract f.d.i in consumer durable and f.m.c.g fronts.Besides,I feel gold imports need not be curbed to bring down current account deficit.It may please be noted that 35 to 40% of the imported gold are being exported(sending) back in form of ornaments ie finished product.central govt.seriously think of cutting down on crude oil bill by introducing ethnol blend and other herbal media as alternatives.Besides,offering of subsidy to produce renewable energy in the country as it can also reduce crude oil consumption to some extent. Scientific plastic waste management can re-produce oil and generation of power which can make country plastic free-from. Suresh.n.sagar-secretary-Karnataka state plastic association and kassia
Tarrif Hurdles
Ghanshyam Sarda | Wed Feb 26 15:29:41 2014
We try to import variety of products from India. The pricing given is always fluctuating from India due to various reasons. One of them is the variety of taxes. Streamline of taxes for movement of goods across states will benefit greatly manufacturing. The product can be manufactured in any state where facilities are provided in terms of labor, infrastructure, power supply and other related matters.
CST AND CONCESSION FORM
S. RAGHAVAN | Wed Feb 26 13:32:04 2014
With reference to your article and mention about the GST, we as a tiny sector are worst hit by the concession forms or c-Forms. Most companies either default on issuing the form or delay to a great extent. not to mention the kind of stress and other impact this issue produces. We end up spending a huge resource on collection of these forms from customers out of the state. The delay in turn renders delayed sales tax assessment and the inevitable corruption at this end. when the government extend the concession to the manufacturers of other states through form-C they should also ensure / enforce that the forms are duly issued to the out of the state dealers. It is really surprising that the issue of form-C which really hampers the sme operation is not highlighted or taken up in a proper forum. We hope to god that the c-Form system will be done away with with the introduction of gst. It is time that this issue is properly represented and i request you to use your good offices for the same.
TAX DEDUCTIONS IN BUDGET
Aravind K Panicker | Wed Feb 26 09:46:12 2014
I am saddened to note that you too have welcomed the tax/excise duty reductions proposed by FM in the interim budget. Congress party when ruled has squeezed industrialists and consumers equally with many taxes. Whenever they proposed any new social programs to help the hapless they find the resource through another tax or duty and when they learned very well that they will not be getting another chance to rule India they proposed these cuts to make it hard for the next government to meet finances. Also the party would have got a good election fund from benefitted industries. Such soap offers should not be welcomed by any industry nor public rather should be condemned - They are now suggesting to remove different types of tariffs and taxes - why the proposal made now - the big Harvard economists could have implemented it long before and not at the time of their leaving. Now if any government implement such programs congress will claim that it was proposed by them. What they could not do for 60 years how they could claim that it is all their program as they claim that all progress in Gujarat were started by congress. Educated intelligentsia should condemn such claims and proposals of dying bodies who could not do anything when they were in full vigor and authority with two third majority also most of their ruling time.
Unwanted forms and procedures
Sunil K Khona, JAY SALES | Wed Feb 26 06:02:09 2014
In addition to multi types of taxes, there are useless, unwanted forms and procedures, which consume time and money, which is a mere unproductive addition to cost. e.g. C form- Anyone who has Sales Tax No can issue C form. Then why is it required ? C form sud be abolished. All Bangalore (Karnataka) Dealers have to download 'e-Sugam' Bill for many items. After the Supplier of other State is ready with his bill, he has to send it to BLR Dealer, who has to download e Sugam bill from the Dept, e mail to the Supplier, then only he can dispatch the goods. What a waste of time ! There may be more such unproductive Procedures, complicating the work and wasting time of the Dealers.
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