1.

Introduce GST

Need to introduce at the earliest as per the roadmap in consultation with industry to overcome the complexities of taxation system and help enhance competitiveness of manufacturing sector.

The Hon’ble Finance Minister has talked of introduction of GST by 2010.

2.

Exempting Central Sales Tax on Components used in Vehicles to be Exported

It is suggested that an appropriate procedure/form etc. should be introduced for exempting goods from levy of CST, which is to be used in manufacture of products to be exported.

The industry is purchasing various components, raw material, etc. for use in manufacturing of vehicles. Quite a large portion of production is being exported.

As per present CST rules any party can purchase any material at NIL CST against Form-H provided that material is exported by him as per prescribed procedure. However, this facility of Form-H is not available to manufacturers for purchasing raw materials/components, etc. for export production.

Basic spirit of all tax laws (like excise duty, sales tax, custom duty, etc.) is that no tax should be levied on goods being exported. However, levy of Sales Tax (CST) on items used in manufacturing of export vehicles is contrary to the basic spirit of keeping export goods exempt from all the taxes.