Millat Tractors shuts plant on lack of GST refund mechanism

Millat Tractors Ltd (MTL) has stopped tractor production till further notice due to the government’s failure to issue a mechanism for payment of refund claims. In a stock filing on Thursday, MTL informed all the stakeholders that the general sales tax (GST) on tractors is 10 per cent and the GST on all input raw materials is 18 per cent, resulting in a continuous stream of refunds. The farm machinery maker said the government has yet to issue any mechanism for payment of refund claims despite MTL seeking clarification. As a result, the company is now constrained to stop production till further notice. On Aug 12, MTL had warned that sales and bookings of tractors were limited and only being made to agri-loan customers. As a result, completely built-up (CBU) units are piling up, and working capital is squeezing.