GST cut on tractors: MCCI hails government decision

President Multan Chamber of Commerce & Industry (MCCI), Mian Anis A Sheikh has hailed the government's decision to reduce GST on tractors from 16 percent to 5 percent so that the prices of tractors may be brought within the purchasing range of small landholders.
He said that the farmers heaved a sigh of relief, as the prices of tractors would be reduced by Rs 60,000 to 90,000 which would boost sell tractors and help generate more revenue. Reduction in GST on tractors was a win-win situation for all the stakeholders and would help the low-income farmers to follow modern ways of farming. He was of the view that mechanisation of agriculture was the need of the hour and low-priced farm machinery would attract more and more farmers to upgrade their old and inefficient farming techniques.
It should be noted here that the representatives of tractor and its vendor industry met Chaudhry Pervaiz Elahi in Lahore to intervene in the matter and the minister promised to resolve their issues. He said suspension of bank leasing on tractors was also one of the reasons of drop in sell of tractors.
The representatives of the tractor industry and vendors thanked for resolving issues and saving the jobs of more than 20,000 workers of the tractor industry. Ex-Vice President MCCI, Shamshad Jafari has said that the government had taken a right step by reducing GST and meeting a demand of Automotive Parts Accessories Manufacturers. He thanked the government for clarity of the position on GST on tractors for smooth rolling of the tractor industry wheel because any further delay may make its revival impossible.
He told that only 800 tractors were produced against capacity of 7,000, as the Al-Ghazi Tractors Limited (AGTL) was totally closed while the MTL was working four days a week, primarily due to the effect of GST which has raised the price of 50 Hp tractors by Rs 100,000 and the 85 Hp tractor by over Rs 200,000. The second reason of huge drop in tractors' sale was the lack of clarity and delay on the part of the government in amending the current 16 percent GST regime.
He said that the farmers were holding back their purchases hoping that the government would provide relief by abolishing or reducing the GST, he added. He said that the halt in agri loans by ADBP was also one of the reasons of downfall in tractors sale. This little known industry employed 30,000 people directly and an estimated investment of Rs 20 billion was looking towards the government to give it a new lease of life so that the tractor assembly lines start moving again, he observed.
He said that in India across the board 4-5 percent GST was levied on tractors. Last year, 80,000 tractors were produced in the country and the government collected in the withholding tax head alone Rs 14,000 to 20,000 per tractor which amounts to over Rs 1 billion in revenue.