Nirmala Sitharaman today said that the GST on 2-wheelers merits a rate revision as this category is neither a luxury nor a sin good.
Finance Minister Nirmala Sitharaman today said that the GST on 2-wheelers merits a rate revision as this category is neither a luxury nor a sin good. While addressing the captains of the Indian Industry in CII meeting, FM Sitharaman said this in a response to a question about the need for lowering GST rates on 2-wheelers. “This was indeed a good suggestion as this category is neither a luxury nor a sin good and hence merits a rate revision and consequently, this will be taken up with the GST Council,” the Finance Minister said.
Further, taking cognizance of the fact that many sectors such as tourism; hotels & hospitality; real estate & construction; and airlines have been disproportionately affected by the pandemic, FM Sitharaman added that these are critical sectors with significant multiplier impact on the economy. Hence, in order to ease the pain of a few of these ailing sectors, the Standard Operating Procedures (SoPs) for the hotels, banquets & related activities will be looked into, according to the Ministry of Finance.
Nirmala Sitharaman also discussed the issue of strategic disinvestment and said that there was a need to move fast on cabinet cleared disinvestment decisions. She also assured the private investment cycle will pick up post-Covid, as even after a major cut in corporate tax, investments couldn’t take off due to the coronavirus pandemic.
The Finance Minister hailed Productivity Linked Incentives (PLIs) schemes and underlined that they have helped to speed up the manufacturing of critical bulk drugs and APIs in 6 states. She also updated that the government is taking periodic reviews to expedite the due payments to the industry. Citing the infrastructure sector as a key area, she added that external funds will be welcome in the sector.
Meanwhile, Uday Kotak, President, CII, said that due to the supportive steps taken by both the central government and RBI, the industry is seeing ample signs of a nascent recovery from the lows seen in April-May as a result of. However, the localised lockdowns implemented in many states has given rise to supply-side bottlenecks, which could impede growth when demand-side cranks up, he added. He further said that government-owned institutions like NABARD, SIDBI, and NIIF have the potential to evolve into development finance corporations in order to support recovery.