Dip in commercial vehicle sales partly due to GST

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The improvement in economic efficiency from the introduction of Goods and Services Tax (GST) is one of the reasons for slowdown in commercial vehicle sales, Dr. T.V. Somanathan, Additional Chief Secretary and Commissioner of Commercial Taxes, said on Thursday. “There has been significant improvement in economic efficiency as a result of introduction of GST. The removal of check posts, the abolition of octroi, entry tax and numerous physical checks is the first and foremost evidence of improvement in economic efficiency which we should not forget. People who have been crossing the borders across States in India have seen the difference,” he said.

Mr. Somanathan was delivering the keynote address at the national conference, “GST — Unresolved Issues and Agenda for the New Government” organised by Assocham. He pointed out that now a fewer number of commercial vehicles are needed to move goods, when compared to the pre-GST regime.“There is a secular decline in the need for commercial vehicles. The total number of drivers required has also declined,” Mr. Somanathan said. To that extent, the decline in commercial vehicles is good, he added. Mr. Somanathan said that one of the achievements under GST is that the States have been able to protect their revenues. He said that in Tamil Nadu, the growth rate in State’s GST revenue in 2018-19, net of refunds and compensation was about 8%, which is slightly higher than the average sales tax growth in the previous four years.

There has been no adverse effect on the revenue front due to the implementation of GST as feared by some quarters (because of Tamil Nadu being a manufacturing State),” he said. In his inaugural address, M. Ajit Kumar, Principal Chief Commissioner of GST and Central Excise, Chennai, pointed out that one of the key issues for the delay in refunds to exporters is the wrong entry of invoices. “The system is automated. About 30% of exporters have got their refunds within six days of filing all necessary documents correctly. Remaining 70% can also do it, hopefully things would be better this year,” he said.

Read more at: https://www.thehindu.com/news/cities/chennai/dip-in-commercial-vehicle-sales-partly-due-to-gst-tv-somanathan/article27154323.ece