Source: The Hindu Business Line, Sep 21, 2019
New Delhi: Manufacturers of rail equipment,
including wagons, coaches and rolling stock, will be able to get more input tax
credit (ITC) with the GST Council approving their proposal to increase GST to
12 per cent from 5 per cent. The move will increase the competitiveness of the
products made in the country.
This has been a long pending demand of
railway wagon, coach and engine manufacturers, and had been raised by the
Confederation of Indian Industry (CII) and supported by the Railway Ministry.
Recently, Wabtec, the company that acquired
GE Tranportation, had explained that input components that go into locomotives,
attract a tax of 12-18-28 per cent. This created a situation where the tax on
inputs was more than that on ouput products. This led to an increase in cost,
which was borne by the manufacturers to the extent of the gap between the
“The announcement of increase in GST
rate from 5 to 12 per cent on rail goods, reinstates the Government’s intention
to bring the (Indian rail) industry back on track, ” said Anand
Chidambaram, Chairman, rail transportation and equipment division,
Confederation of Indian Industry.
Finance Minister Nirmala Sitharaman also
announced a cut in GST on marine fuel from 18 per cent to five per cent. She
said 0.5 per cent FO had been added, a move which seemed to indicate low
sulphur fuel oil would also be charged at five per cent GST.