Rahul Mehta Gandhinagar LsCandidate

Sat Aug 05 2017 17:28:14 GMT+0000 (Coordinated Universal Time)

Imports under GST regime may (may, or may not) become cheaper !!!
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https://www.quora.com/How-GST-bill-will-impact-the-import-of-commodities/answer/Raghav-Awasthi-3
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One person has given good reasons why imports
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I am quoting his answer. And I agree with him.
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To my mind GST would make imports cheaper & could go against 'Make in India'policy of Govt.

Under current Tax regime imports undergo following Tax Structure:
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Value of Goods - 100
Custom Duty - 10
Other Duties - 19.5 (CVD + SAD + Cess + Loading Charges)
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Total Cost of Goods 129.5
Refund 5 (SAD)
Net Cost of Goods 124.5
Selling Price 150
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Profit to Dealer 25.5
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Under GST Tax structure shall be:
Value of Goods - 100
Custom Duty - 10
IGST @ 20% - 22
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Total Cost of Goods 132
Refund 22
Net Cost of Goods 110
Selling Price 150
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Profit to Dealer 40
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Under GST regime Custom duty would prevail & CVD, SAD, CESS etc. shall be replaced by IGST which would be fully refundable. This may benefit most of the importers. Some people may argue that under current regime also CVD can be passed on hence may not form part of cost to the trader however that's still an option which is much less explored viz a viz GST wherein Cash refund would be granted.
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However, If we presume an ideal scenario, dealers may pass on the additional profits earned to final consumer & could make prices cheaper to keep their margins intact. Which is exactly the reason why Govt is hoping that GST would bring down prices & inflation & the real reasoning behind implementation of GST.
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----------------------- end of his post ---
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I would re-write last para as --- ignore ideal scenario. Say importer wants to keep same profit as before, then his final sale price to his buyer reduces. And so imports of FINISHED goods become cheaper
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In existing law, there was custom duty plus other duties, which were input credits ONLY to manufacturers and NOT traders.
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In GST, entire payment except custom duty is refundable to trader as well.
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So if FINISHED goods are imported, then under GST regime, they become cheaper than past
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And on texttile industry, this will be double whammy . Because imports become cheaper. And in past, there was no excise / vat on medium level manufacturers and sellers and no service tax on job work. Now now they come under GST !!
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Solution?
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We should exit WTO and impose custom duty of 100% to 300%
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And we should cancel GST and instead impose wealth tax.
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Pls google on "import GST india increase" and "import GST india decrease"

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