There is strong demand for reduction in GST for Automobile sector. While Automobile sector is facing serious demand slowdown. But knee-jerk reaction in helping the particular industry is not going to help the economy.
Instead, taxes by way of GST, Toll Tax, Road Tax, Permit fee applied on commercial vehicles need to be rationalized as these are not luxury item and it has impact on cost of moving goods from one place to another affecting the agricultural goods most. Transport sector is widely distributed and competitive enough for having pass-through mechanism to pass on the benefits of cut in taxes.
Similarly, high rate of tax on cement is uncalled for. The reduction in cost of cement will benefit both housing and infrastructure sector.
Govt. should also expedite the process of developing tier-II and tier-III cities. Improved air-connectivity for these cities is a step in right direction. Growth there will lead to increased demand of private vehicles in these centers. App-cab aggregators find it difficult to operate in these cities. Growth of tier-II and tier-III cities will also increase the semi-urban areas, thus spreading the economic growth to a larger geography.
GST collection may rise, if there is uptick in the economy and consumption level improves. Even the sales of private vehicles will improve, if demand and growth cycle move to rural and semi-urban centers.
Govt. should aim at high volumes-low taxes from a low volumes-high taxes regime.
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