28 per cent GST on tractor parts to hurt companies, farmers: Sonalika

Bhopal: Sonalika International Tractors today opposed the 28 per cent levy on tractor parts proposed under the Goods and Services Tax (GST) structure, saying it will hurt the sector and also farmers.

The tractor manufacturer said the tax on tractor parts should remain at the existing level of 14 per cent.

"The government has proposed to raise GST on tractor and car parts to 28 per cent while at present it is 14 per cent. This will result in an increase in cost of tractors and would adversely impact farmers in a major way," Sonalika International Tractors Vice-President (Sales and Marketing) Munish Kumar told reporters.

"We, along with other tractor companies, are discussing the matter with the government and have demanded that GST remain at 14 per cent in the interest of farmers," Kumar said.

Rise in GST on tractor parts will also affect companies, he said. However, Kumar did not specify the expected increase in price of tractors post-GST (at 28 per cent levy).

The Centre is targeting a July 1 roll-out for the unified tax system. Kumar said in the fiscal 2016-17, the company sold 8,507 tractors, registering a growth of 22.6 per cent over FY 2015-16, when the figure stood at 6,841 units.

In April, the company sold 932 tractors while the figure was 683 in the same month last year, he said. Buoyed by sales in Madhya Pradesh, the company is planning to introduce more new products in the state to maintain its leading position, he added.