INDUSTRY NEWS

Lower GST, incentive-based scrappage policy tops the auto sector’s wish list

A reduction in the Goods and Services Tax (GST) rate to 18 per cent on vehicles, introduction of an incentive-based scrappage policy, and measures to boost consumer sentiments top the expectations of the automobile industry — which is grappling with one of the worst slowdowns in decades — from the upcoming Budget.

“At the Society of Indian Automobile Manufacturers (SIAM), we have urged the Finance Ministry to consider announcing an incentive-based scrappage policy and also Budget allocation for internal combustion engine (ICE) bus procurement by State transport undertakings. Increased cost of BS-6 (vehicles) may affect demand, hence, we have also requested the government to reduce GST rates for BS-6 vehicles effective April 1 from 28 to 18 per cent,” said Rajan Wadhera, President, SIAM, and President, Automotive Sector, Mahindra & Mahindra Ltd.

A permanent increase in the depreciation rate on passenger vehicles and two-wheelers to 25 per cent, abolishing the 5 per cent Customs duty on lithium ion battery cells, the withdrawal of the proposed hike in the vehicle registration fee, and the provision of income tax benefit on the interest of vehicle loan on the purchase of green vehicles (such as fuel cell, plug-in hybrid electric vehicles, CNG, LPG, ethanol, methanol) are some of the other pre-Budget recommendations put forward by the SIAM.

A company spokesperson from Maruti Suzuki, the country’s largest carmaker, said:

“We welcome any government steps that will help boost consumerism, revive consumer sentiments and assist in the overall growth of industry and economy.”

Source
The Hindu Businessline
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