Tractor makers are among those, probably a handful, lobbying hard to get the excise duty exemption now on their product removed — more so, with the scheduled rollout of a nationwide Goods and Services Tax (GST) from July 1. These cannot be set off, however, given that the final product — tractor — does not attract any excise. “GST should technically allow for tax on output to be set off against duties/taxes paid on inputs. If tax on various service inputs, which are also non-creditable, gets added, the overall incidence would be 13.85 per cent or so. This is as opposed to “exempted” goods, where input tax credit cannot be availed even if the end-product is not taxed.

Source: Indian Express May 17, 2017 20:31 UTC