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The slowdown in the auto industry is beginning to spread its roots deeper into supporting industries. Auto parts manufactures say that sales have reduced thanks to the decrease in demand for new products. In addition, they say that their GST refunds have been delayed.
Gurpargat Singh Kahlon, the President of the Auto Parts Manufacturers' Association, says that the problem is increasing on an everyday basis, and is directly related to the slowdown in the auto industry.
Parts manufacturers say they are able to cope with reduced production because of decrease in demand, but their biggest problem is the high GST rate dictating their industry. They want to government to reduce the GST from the current 28 percent to a more manageable 18 percent.
High rate of GST rates translate to huge amounts of money sitting in the government's kitty. They also feel that the refunding process has slowed down, causing more hurt to their businesses. They are unable to direct these funds towards sustaining their industry.
Swinder Singh Hunjan, an auto parts manufacturer, said, "28 per cent GST has become a serious problem for our industry, and if this is sorted, we will be able to battle the recession easily. In addition, reduction is also for the betterment of our industry in the future."
Nitin Sharma, another auto parts manufacturer, and member of the APMA, said, "We are battling recession on one hand, and we are running to get back our own money stuck as GST refunds on the other hand."
"Though the delay in the processing of refunds might not be a big issue for every auto parts manufacturer, but the high rate of GST at 28 percent is the problem for everyone. The government must realise the gravity of problems being faced by the auto parts manufacturing industry, and reduce the rate of GST to 18 per cent so that we get the much awaited relief," he added.
Thoughts About The Request For Reduction In GST For The Parts Manufacturing Industry
We think the auto parts manufacture's request for a reduction in GST is justified. While the government is taking some steps to help the automobile industry with the slowdown, the industries supporting them seem to be neglected. The government needs to extend support to all the secondary industries as well.