Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
CO-PRESENTED BY
272
nda:
Needmore seats to Win
Needmore seats to Win
upa:
»
4-min read

Automobile Exporters Under Pressure as GST Refund Gets Stuck

Industry players said as the current GST system of making payments upfront and claiming input tax credit refund is not functioning properly, the working capital requirement for companies have increased and they could rethink on exports till the issues stay unresolved.

PTI

Updated:November 20, 2017, 3:12 PM IST
facebookTwittergoogleskypewhatsapp
Automobile Exporters Under Pressure as GST Refund Gets Stuck
(Image for representational purpose/Reuters)
Loading...
Passenger vehicle exports from India have run into GST speed breaker as manufacturers have been unable to file claims since July and pending sum has crossed over Rs 1,000 crore. Industry players said as the current GST system of making payments upfront and claiming input tax credit refund is not functioning properly, the working capital requirement for companies have increased and they could rethink on exports till the issues stay unresolved.

News18.com Presents Tech and Auto Awards 2017 | Vote For Your Favourite Smartphone, Car, Two-Wheeler And More!

Moreover, Ford India CFO David Schock told PTI that the quantum of cash needed to meet compensation cess of 1-22 percent under GST from 1-4 percent as existed earlier has been a "steep increase". Elaborating on issues faced by automobile exporters, Society of Indian Automobile Manufacturers (SIAM) Deputy Director General Sugato Sen said, "Companies which are exported-oriented are suffering because the current GST system of making payments upfront and claiming the refund is not working properly." It is leading to accumulation of GST credit, which is hurting the exporters, he added. "There are companies whose refund has gone up to hundreds of crores of rupees. It has led to increase in the working capital requirements of the companies, which has made them cautious in exports," Sen said.

News18.com Presents Tech and Auto Awards 2017 | Car of The Year: Jeep Compass or Maruti Suzuki Dzire? Vote and Win

In the July-October period, passenger vehicle exports declined by 14.45 percent to 2,35,933 units as compared with 2,75,789 units in the same period of last year. In the same period, total vehicle exports, including two-wheelers and commercial vehicles, rose by 8.07 percent to 13,17,936 units as compared with 12,19,460 units in July- October period of 2016.



While some of the major export markets have slowed down, industry players said the GST refund issue has also played a part in the decline of vehicle exports.

According to an industry source, the pending refund amount of top four-passenger vehicle exporters alone have crossed Rs 1,000 crore so far.

Although Schock did not comment on the amount, he said while the government provided the functionality of refunds, "it is yet to be operationalized (and) because of lack of clarity and processes, companies have not been able to file refund claim from July 2017 until October 2017".

News18.com Presents Tech and Auto Awards 2017 | Two-Wheeler of The Year: Bajaj Dominar or KTM RS 390? Vote And Win

"In case of refund of input tax credit, the absence of a clear procedure and roadmap is another area of concern," he added. He further said, "Exporters now need to allocate significantly more funds due to the revised norms/tax structure and blocking working capital for an extended duration, especially at a time when interest rates are high, doesn't augur well." Expressing similar views, Volkswagen India Pvt Ltd President & Managing Director Andreas Lauermann said, "We are facing challenges since there is no clarity on how refund of GST will be paid on export cars. This has led us to having a lot of credit blocked by the authorities."

Seeking exemption from payment of compensation cess on exports, he said with the increase of cess on cars, the situation has worsened. "Going forward, we could be forced to rethink our exports if these challenges do not get resolved," Lauermann said.

News18.com Presents Tech and Auto Awards 2017 | Hatchback of The Year: Tata Tiago or Hyundai Grand i10? Vote And Win

An executive of another major passenger vehicle manufacturer said on the condition of anonymity that the increased working capital to meet exports requirements is putting extra pressure on business. "When a company is made to block Rs 100 crore a month for exports due to the current issues regarding refund and not exactly knowing when will it be refunded, it raises many questions," the executive said. Companies with big domestic sales can still manage it but the pressure is mounting more on the export-oriented manufacturers, Sen added.

Ford India, Volkswagen, General Motors, and Nissan are the top export-oriented manufacturers in India, while Maruti Suzuki and Hyundai are also major exporters but with significant domestic presence.

Also Watch: 2017 Volkswagen Passat | First Drive Review | Cars18


(Get detailed and live results of each and every seat in the Lok Sabha elections and state Assembly elections in Andhra Pradesh, Odisha, Arunachal Pradesh and Sikkim to know which candidate/party is leading or trailing and to know who has won and who has lost and by what margin. Our one-of-its-kind Election Analytics Centre lets you don a psephologist’s hat and turn into an election expert. Know interesting facts and trivia about the elections and see our informative graphics. Elections = News18)
| Edited by: Ayushmann Chawla
Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwittergoogleskypewhatsapp
 
 

Live TV

Loading...
Countdown To Elections Results
  • 01 d
  • 12 h
  • 38 m
  • 09 s
To Assembly Elections 2018 Results