Rail wagon makers buck the trend, seek higher GST ‘about:reader?url~htps://economictimes.indiatimes.com/news/econ lof4 {> economictimes.indiatimes.com Rail wagon makers buck the trend, seek higher GST By Deepshikha Sikarwar 3-4 minutes Amid the clamour for slashing GST rates, rail manufacturers are seeking the opposite—an increase. Updated: Aug 29, 2019, 05.28 PM IST ThinkStock Photos NEW DELHI: Amid the clamour for cuts in goods and services tax (GST) rates to help revive demand, rail manufacturers are seeking the opposite—an increase. AlstomNSE -2.50 %, General 09/05/2019, 16:5Rail wagon makers buck the trend, seek higher GST about -reader? url=https:/economictimes indiatimes comv/news/econ. 2of4 Electric and Bombardier, which have set up manufacturing facilities in the country for rail wagons, have written to the government, seeking a 12% GST levy on rail products from 5% now. Inputs are levied GST of 5% and 18%, leading to an inverted duty structure as hundreds of crores of rupees in input tax credit are stuck, the companies say. This gives imported rail products an advantage as they just have to pay the 5% levy, frustrating the government's aim to boost local manufacture. “The restriction on refund of unutilised input GST credit on account of inverted duty structure has increased costs of the railway products manufacturing industry and gives a competitive disadvantage to domestic products vis-a-vis imported products, thereby adversely impacts Make in India initiative,” said Alstom India chief financial officer Simon Garnier. Refunds of unutilised input tax credit on certain notified goods including railway products has been restricted. The products affected include locomotives, rolling stock, wagon and coaches. StUCK FUNAS |, inputsused in EES i ) Rall manufacturers manufacturing FEES eeerad | for increase in GST face GST of to 12% from 5% 5%-18% | > Industry wants _| > Industry says '> Cos say this lifting of restriction | importers at | hurts make on ITC refunds 1 an advantage | in India Peer eerrriny 09/05/2019, 16:5Rail wagon makers buck the trend, seek higher GST about:reader !url~https://economictimes indiatimes, com/news/econ. 30f4 aA a ooo Garnier said the industry has been in continuous talks with the concerned authorities and expects the government to resolve this matter urgently to provide domestic companies a level playing field. They have lobbied the finance ministry, railways, the GST Council and state governments. They want the government to raise the GST on final products, allow input tax credit or lower the levy on inputs. "GST is a positive step towards a simplified tax structure. However, rail industry suppliers are grappling with severe financial burden on account of inverted duty structure coupled with restriction on refund of unutilised credit,” said Nalin Jain, group president, equipment business, Wabtec Corp. Additionally, it was leading to an import bias with indigenous rolling stock costing more than imports. Due to nonavailability of refunds, the unutilised input tax credit on account of the inverted duty structure has become a cost, said an industry official who did not wished to be named. “This has led to an inefficient tax structure and unfair advantage to afew rail suppliers including suppliers who import rolling stock,” said a Bombardier executive. “This inverted duty structure followed under the GST regime is an unfair trade practice, provides non-level playing ground to rail suppliers who have single business interests in India and is completely against the agenda of government's make in India initiative.” Also Read 09/08/2019, 16:5Rail wagon makers buck the trend, seek higher GST about:reader 'url=htips://economictimes indiatimes.com/news/econ. 40rd Rail wagon makers in demand; surge up to 20% Rail wagon makers surge upto 12% as government releases order Commenting feature is disabled in your country/region. Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service 09/05/2019, 16:5