No GST relief for cars, biscuits: Panel rejects industry plea for tax rate cut

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Updated: September 18, 2019 5:24:09 PM

Ahead of GST Committee Meet on Friday, the panel has dashed hopes of biscuit makers and the auto industry as the rate cuts on cars and biscuits will not be meted out.

Auto sales, Auto sales india, Auto sales slump, Auto sales decline, gst auto sector, gst rate on autoWhile both FMCG and auto industries are reeling under a demand slowdown, industry leaders have been making requests to the government for bringing about a tax slab change.

Ahead of GST Committee Meet on Friday, the panel has dashed hopes of biscuit makers and the auto industry as the rate cuts on cars and biscuits will not be meted out. The GST Fitment Committee has ruled out rate cuts on biscuits, cookies and cars, according to TV channels. However, the fitment committee is considering a GST cut on hotel tariff of 28% to 18% for rooms rented for Rs 7,500 and above. The same is expected to be revised to Rs 10,000 for 28% slab, ET Now and CNBC TV-18 reported. While both FMCG and auto industries are reeling under a demand slowdown, industry leaders have been making requests to the government for bringing about a tax slab change in the hope of providing a fillip to demand. 

Biscuit woes

Biscuit makers have been aggressive in their demand for getting rate cut on premium 18% tax slab. Speaking to Financial Express Online, Mayank Shah, Category Head, Parle, had said that the company is very hopeful that the government will accede to the demands of the biscuit makers as the government also wants to revive demand, he said on Tuesday. The company had earlier said in various media interviews that they might have to lay off thousands of employees if demand of their standard biscuits doesn’t revive. According to Mayank Shah, Parle has suffered a sales slip of 6-7% on its standard range of biscuits which includes Marie, Glucose and Milk. These biscuits sell for Rs 100 per kg and less but are clubbed with premium biscuits and are taxed at 18% slab. 

Auto slump

On the other hand, auto sales have dropped to a record low and India’s biggest carmaker Maruti Suzuki’s sales slumped by over 30% in the last months. Amid the heightened slowdown, the auto industry bodies had shifted the onus on the government to cut Good and Services Tax (GST) so that their demand could pick up. However, the same would have meant at least Rs 30,000 crore loss in revenues to the government had the tax slab been reduced to 18% from 28%, according to the internal estimates of the tax department.

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