Manufacturers in NE and Himalayan states demand GST refund from states

Business turning unattractive in absence of refunds

by Arjit Singh Bhambra

The manufacturing units in north-eastern (NE) and himalyan states are still perplexed by the ambiguity over the continuation of tax benefits under the GST regime, as per a report in Business Standard. Key concerns include reduction of 42 per cent in the tax benefit, unavailability of an appeals mechanism, and the restriction on refunds for job work in case of third-party manufacturing contracts. Recently, the department of industrial policy and promotion (DIPP) notified guidelines allowing refunds up to 58 per cent of the CGST [see here]. The central government has further clarified that since 42 per cent of GST is passed on to states by way of devolution, it can not reimburse that portion. Manufacturing units have now approached the state governments for providing reimbursements and continuation of the tax benefits from their share of the GST. However, tax experts have suggested that the current scenario has rendered manufacturing unattractive in these states.

References
1. http://smartinvestor.business-standard.com/market/story-488888-storydet-Tax_benefit_cloud_over_plants_in_Northeast_hilly_states.htm#.Wd4BE1R95FQ
2. http://www.business-standard.com/article/economy-policy/factory-units-in-northeastern-states-under-gst-benefit-cloud-117101001113_1.html
CMIE STATISTICS
Unemployment Rate
Per cent
5.9 -0.1
Consumer Sentiments Index
Base September-December 2015
96.0 +0.2
Consumer Expectations Index
Base September-December 2015
96.5 +0.3
Current Economic Conditions Index
Base September-December 2015
95.0 0.0
Quarterly CapeEx Aggregates
(Rs.trillion) Jun 17 Sep 17 Dec 17 Mar 18
New projects 2.50 1.23 1.34 2.78
Completed projects 0.87 1.24 1.11 1.35
Stalled projects 2.68 0.69 0.88 3.41
Revived projects 0.23 0.34 0.22 0.24
Implementation stalled projects 0.76 0.78 0.71 1.05
Updated on: 19 Jun 2018 8:20PM
Quarterly Financials of Listed Companies
(% change) Jun 17 Sep 17 Dec 17 Mar 18
All listed Companies
 Income 9.6 7.9 11.9 10.7
 Expenses 9.9 9.0 13.0 17.3
 Net profit -19.8 -18.0 -14.3 -78.4
 PAT margin (%) 5.3 5.5 4.8 1.4
 Count of Cos. 4,512 4,498 4,486 4,225
Non-financial Companies
 Income 10.2 8.2 13.3 12.4
 Expenses 10.5 8.1 12.3 13.0
 Net profit -25.1 -6.0 13.1 1.4
 PAT margin (%) 5.2 6.2 6.4 6.8
 Net fixed assets 9.2 11.9
 Current assets 78.6 8.4
 Current liabilities 11.0 10.7
 Borrowings 10.4 1.4
 Reserves & surplus 5.2 8.1
 Count of Cos. 3,480 3,467 3,469 3,275
Numbers are net of P&E
Updated on: 19 Jun 2018 8:21PM
Annual Financials of All Companies
(% change) FY15 FY16 FY17 FY18
All Companies
 Income 5.6 1.8 5.6 5.5
 Expenses 5.7 1.9 5.6 6.2
 Net profit 0.0 -10.0 26.3 0.9
 PAT margin (%) 3.0 2.8 3.5 12.0
 Assets 9.5 10.1 7.2 18.5
 Net worth 8.5 11.3 6.8 5.4
 RONW (%) 5.8 4.9 5.9 13.6
 Count of Cos. 25,852 24,013 21,375 64
Non-financial Companies
 Income 4.8 1.0 5.4 4.0
 Expenses 5.0 0.3 5.7 1.6
 Net profit -8.2 19.2 21.2 18.3
 PAT margin (%) 2.0 2.4 3.0 16.5
 Net fixed assets 13.3 17.2 6.2 5.2
 Net worth 6.9 12.0 5.5 -2.4
 RONW (%) 4.6 5.1 6.1 21.6
 Debt / Equity (times) 1.1 1.1 1.0 0.1
 Interest cover (times) 1.9 1.9 2.1 34.4
 Net working capital cycle (days) 66 65 62 43
 Count of Cos. 21,088 20,114 17,854 48
Numbers are net of P&E
Updated on: 04 Jun 2018 11:54AM