Mahindra & Mahindra (M&M) expects the Maharashtra State
Government to clarify its stand on the recent
modifications to the Value-Added Tax (VAT) rule, reports
stated.
Reports quoted M&M's President of Automotive and Farm
Equipment sectors, Dr Pawan Goenka, as saying that if
the VAT rebate had been there in the first quarter, the
company's operating profit margin would have been higher
by 0.6-0.7%.
“The impact on the second quarter could be similar. We believe
that by August-end some announcement will be made by the Government, maybe on
revising the rule or compensation for the losses suffered. It could impact
future investment in the state,” he was further quoted as saying.
According to reports, auto companies like Bajaj Auto, Volkswagen, Kirloskar Oil,
Tata Motors and General Motors have been hit by the VAT rebate under which
companies cannot claim VAT set-off for products that are sold outside the state.
