DOUBLE BIND: It could dent GST revenues

Industry believes that a GST rate cut could go a long way in boosting diminishing demand in the badly hit auto sector. It’s a sensitive situation for govt as on the one hand it is trying every possible step to support the economy but on the other, a cut could significantly dent falling GST revenues (below Rs 1 lakh crore last month). 

Govt could look at partial GST relief for auto, like a cut in rate for two-wheelers, hybrid cars and small cars. It would need to be seen how much positive impact such a cut could have considering the upcoming festive season. 

Prashanth Agarwal, partner, PwC