Executive Summary:
Anant J. Talaulicar, Chairman & Managing Director, Cummins India Limited, said,
The decline in domestic sales during the current quarter was mostly driven by GST
implementation and lack of readiness challenges faced by some of our major customers. We
also faced unforeseen supply constraints from the supplier base. While a revolutionary
change such as GST is bound to have some unforeseen, negative consequences, I am
optimistic about the longer term positive impacts on our business and country. I do believe
the worst of the teething GST issues is behind us. We believe that for the most part the
sales decline would be recovered in subsequent quarters this fiscal year once the GST
implementation and supply issues are resolved. We remain positive on the full year outlook
for domestic sales as the underlying demand conditions remain stable to increasing.
Our export markets demand is a mixed bag with gradually improving demand for our
high horsepower engines and continuing declines in demand for the low kilowatt generator
sets.
We believe this is based on varying degrees of recovery taking place in the global economy,
commodity markets and geographies. We believe this trend is likely to play out in the
medium term.
We believe we continue to be positioned to outperform in our industry and are continuing
to invest judiciously in new products, increase our customer focus, drive cost
reduction, and improve productivity and quality, and thus remain strongly positioned to
continue delivering value to all our stakeholders.
About Cummins India Limited
Cummins India Limited, headquartered in Pune since 1962, is the country's leading
manufacturer of diesel and natural gas engines for power generation, industrial and
automotive markets.
Goods and Service Tax (GST) one of the biggest and most impactful changes in the history of Indian
Taxation that implemented from 01.07.017. GST will transform all realms of business and extend well
beyond tax. It will impact entire value chain of the operation e.g procurement, distribution,
warehousing, sales, pricing and IT system. GST has altered our business models, associated value
chain and the way we execute transactions today
The important areas which has undergone a complete change under GST are mentioned below
Sl. No. Areas Implications under GST
Intra-state Central GST (CGST) + State GST (SGST) /
Change in Tax structure (on Union Territory GST (UTGST) to be levied
1
supply of goods & services)
Inter-state Integrated GST (IGST) to be levied. Co
Advances in respect of supply of services as well as
2 Advances
goods will attract GST.
Intra-state Movement of goods within the same State is
exempt from GST. Transfers to be made under the cover of
a Delivery Challan without charging GST.
3 Stock Transfer
Inter-state Movement of goods outside the State will
attract IGST and to be made under the cover of a tax
invoice.
Depots will avail input tax credit under GST on
4 Stockyards/Depots
procurement of services as well as goods.
TCL will have to pay GST under reverse charge and issue
Procurement from a self invoice. As far as possible depending on the
5
unregistered vendors business needs, purchases from unregistered vendors
should be avoided
Invoice-level data will be uploaded in the monthly GST
6 GST Returns
returns
Credit base to become wider in GST.
7 Input Tax Credit (ITC) Matching concept introduced for availing ITC. Invoices to
be uploaded by the vendor in his return which needs to be
matched by TCL records in the returns
Mines presently not Input Tax Credit to be available on procurement of goods
8
registered under excise and services under GST
Transfers to SPCs
Intra State: Is exempted under GST and despatch will be
made under the cover of a Delivery Challan. Invoices will
be raised by TCL on payment of applicable GST for
clearances from premises of SPCs.
SPCs (manufacturing and Inter State: GST invoice will be raised in the name of TCL
9 principal place of business in the State where SPCs is
non- manufacturing EPAs)
located and SPC will be made the consignee in the invoice.
Delivery challan in the name of SPC will be raised from the
principal place of the business in the respective State
where SPC is located
Conversion charges All SPCs would charge GST on
their conversion charges and input tax credit will be taken
by TCL
10 Form C & F No requirement of issuance of Statutory Form
Electricity and Petroleum products, i.e., petroleum crude,
high speed diesel, motor spirit, aviation turbine fuel, natural
11 Goods out of ambit GST
gas, have been presently kept out of the ambit of GST and
current taxes would continue to apply
