Showing posts from July, 2017

Is GST killing Make in India?

Is GST killing Make-in-India?  Post GST, FIAT offers deep cuts on its imported Jeep models . Is GST making imports cheaper? Is it harming make-in-India initiative?  While it is easy to dismiss such questions in the face of yay-we-rolled-out-GST euphoria, it still makes sense to analyse some challenges that GST has thrown up in terms of cheaper imports and greater competition to domestic industries.  Cheaper imports for finished goods Before GST, the major components of import duties were Basic Customs Duty (BCD) and Additional Duty of Customs (ADC) along with Special Additional Duty (SAD). The ADC and SAD together were bigger components that usually totalled around 20% of the value of goods for most of the items and not refundable to most extent.  The ADC part was equal to central excise duty (usually 12 to 16% for most items) and SAD was equal to 4% of value of goods. For a merchant who imported finished goods and sold them locally, SAD was refundable upon produ