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New Delhi, Jan 26 () Leading industry body Indian Auto LPG Coalition has sought GST reduction on Auto LPG as well as on conversion kits for gaseous fuels to promote the adoption of clean automotive fuels.
LPG used as fuel in automobiles or Auto LPG, which is among the cleanest alternative fuels with a Global Warming Potential of 'zero' is currently taxed at 18 per cent GST. Also, the GST rates on Auto LPG/CNG conversion kits stand at a prohibitive 2 per cent, IAC said.
High GST rates on clean fuels and conversions kits are in complete variance to the government's stated green mobility push, it said in a statement.
"We seek the attention of Finance Minister Nirmala Sitharaman towards the imminent need for devising friendly policies to allow rapid growth of environment-friendly transport fuels such as Auto LPG. Auto LPG which is being promoted actively by governments across the world is facing discriminatory policies in India. It is taxed at a high GST slab of 18 per cent. Similarly, conversion kits for auto LPG and CNG are placed at the highest slab of 28 per cent which is meant for either luxury goods or demerit items like tobacco products," said Suyash Gupta, Director General, Indian Auto LPG Coalition (IAC).
IAC said LPG is the most widely used alternative fuel in the world, with a proven track record of improvement in air quality.
The global consumption of Auto LPG has risen by over 40 per cent over the past 10 years, fuelled by environmental concerns. Among the key nations that have successfully adopted this green fuel for their transportation requirements are South Korea, Turkey, Poland, Japan, Australia, Italy, Mexico and Russia.
The association said even as India plans a long-term shift to electric vehicles, it is missing out the environmental benefits that can be gained by adopting low hanging fruits like Auto LPG. Investing in a wider basket of clean alternative transport fuels that are more readily available can bring about an immediate improvement in air quality unlike EVs that are still a decade away from becoming commercially viable.
"Apart from the need to lower GST, another critical intervention required is the reform of the Type Approval norms governing conversion to gaseous fuels. The Type Approval norms require companies to renew extremely cost prohibitive Type Approvals for Auto LPG and CNG conversions every three years. This acts as a major hurdle to the industry and has resulted in a rapid dwindling of players in the retro-fitment market. The Type Approval regime must be made industry friendly and its validity must be made perpetual in line with European norms," Gupta said.
More than 26 million vehicles run on Auto LPG globally, supported by close to 71,000 LPG Filling Stations with global Auto LPG consumption exceeding 26 million tonnes. Emissions of harmful nitrogen oxides (NOx) and harmful particulate matter PM 2.5 are almost negligible for Auto LPG, claimed IAC.
IAC is the nodal body for the promotion of Auto LPG in India. Members of the Coalition include the oil PSUs, private auto LPG marketers, kit suppliers and equipment manufacturers. The coalition works closely with the World LPG Association, Society of Indian Automobile Manufacturers and Automotive Research Association of India. ANZ MKJ

Slash GST on Auto LPG, address policy issues stalling growth: Industry body to FM

New Delhi, Apr 17 () Auto industry body SIAM on Friday said it has sought temporary GST rate cut on vehicles and introduction of incentive based scrappage policy from the government at the earliest in order to revive the sector amid the coronavirus pandemic. While appreciating RBI's announcement to support NBFCs and MSME sector by infusing liquidity in the system, the Society of Indian Automobile Manufacturers (SIAM) sought several 'key interventions' for the the auto sector. "COVID-19 has left the Indian economy and automobile industry in deep distress and financial support and demand revival is a necessity," SIAM President Rajan Wadhera told . COVID-19 is an unprecedented situation and hence requires unique measures, he added. "SIAM is hopeful that the lending rates would be slashed substantially for consumers to benefit in these challenging times," he added. In order to revive the auto industry, SIAM has sought temporary reduction in standard GST rate by 10 per cent across all vehicle categories, auto components while maintaining the current product segment GST rate differential, Wadhera said. The auto industry body has also sought introduction of incentive based vehicle scrappage scheme to generate demand. "The incentives can be in the form of 50 per cent rebate in GST, road tax and registration charges," he added. SIAM has also asked for fund allocation for diesel/CNG bus procurement by state transport undertakings, over and above the allocation for electric buses under FAME 2 scheme, Wadhera noted. Besides, it has also asked to expedite release of all pending payments to vehicle manufacturers and contractors of highway and infrastructure projects against past procurement by central government and other agencies to increase liquidity in the system, he added. Wadher said SIAM has also asked for fast track disbursement of all government incentives and benefits to all industries. "The automotive industry is the backbone of manufacturing sector in India in terms of employment and contribution to GDP, and its revival will be critical for the manufacturing sector and economy of India," he added. MSS RVK

COVID-19: SIAM seeks GST rate cut, incentive based scrappage policy to revive auto sector

<ul><li>M&amp;M, Ashok Leyland and Tata Motors have recovered from their intraday low.</li><li>Gadkari while speaking at a SIAM conference had said that the rising level of pollution is a health hazard for citizens.</li><li>There is no such proposal currently under active consideration by the government, said Gadkari in is clarification</li></ul> The auto index, <keyword id="3540651" type="General" weightage="20" keywordseo="Nifty-Auto" source="Orion">Nifty Auto</keyword>, recovered from its 400 point or approximately 2.5% fall after Union Minister <keyword id="26680" type="General" weightage="50" keywordseo="nitin-gadkari" source="Orion">Nitin Gadkari</keyword> clarified on Tuesday clarified his '10% additional <keyword id="18747014" type="General" weightage="60" keywordseo="GST-on-diesel-vehicles" source="Orion">GST on diesel vehicles</keyword>' comment made earlier in the morning. At the time of updating the story, the index is 1.6% in the red. Auto stocks had fallen sharply after Gadkari said he will seek a "<keyword id="2169429" type="General" weightage="60" keywordseo="pollution-tax" source="Orion">pollution tax</keyword>" in the form of additional <keyword id="6354679" type="General" weightage="80" keywordseo="gst" source="Orion">GST</keyword> of 10% on diesel vehicles and gensets in order to cut down on air pollution. This in turn has dragged the stocks down as most of the commercial vehicles in the country currently run on diesel. At the time of updating, Mahindra and Mahindra is down 1.7% but shown a recovery from the 3.48% slide. Ashok Leyland has now recovered slightly too and is down 2.4% while Tata Motors which had slipped 2.8% is now down 1.8%. The Road and Transport Minister has subsequently clarified his comment on X (formerly Twitter). He said that that there is no such proposal currently under active consideration by the government. <div type="twitter" handle="nitin_gadkari" handlename="nitin_gadkari" favoritecount="0" retweetcount="0" id="1701501884324860043"></div> Earlier, speaking at the 63rd Annual SIAM convention Delhi, the Union Road Transport and Highways Minister said the rising level of pollution is a health hazard for citizens. "I am going to handover a letter to the Finance Minister this evening stating that an additional 10% GST be put on diesel-powered vehicles," Gadkari said. In the passenger vehicle segment, various carmakers including Maruti Suzuki India and Honda have already stopped manufacturing diesel cars. Gadkari said the contribution of diesel cars has already come down drastically in the country and the manufacturers need to stop selling them in the market. Terming diesel as a hazardous fuel, he noted that the country has to import the fuel to meet the demand. "Say goodbye to diesel... Please stop making them, otherwise we will just increase the tax so much that it would become difficult to sell diesel cars" Gadkari said. He said he will propose additional GST on diesel-powered generators as well. Automobiles are currently taxed at 28% GST, with additional cess ranging from 1% to 22% depending on the type of vehicle. SUVs attract the highest GST at the rate of 28% along with a compensation cess at 22%. Gadkari also asked the industry to focus on environment-friendly alternative fuels like ethanol. He also asked the industry to focus on green hydrogen. Explained: <a href="https://www.businessinsider.in/policy/economy/news/what-is-ethanol-blending-current-targets-and-challenges-for-india/articleshow/103460113.cms" data-type="tilCustomLink" target="_blank">What is ethanol blending and what are the challenges faced by India</a>

Auto stocks recover after Gadkari clarifies his '10% additional GST on diesel vehicles' comment

Mumbai, Shares of two-wheeler majors <keyword id="6357252" type="COMPANY" weightage="20" keywordseo="Hero-MotoCorp">Hero MotoCorp</keyword>, <keyword id="6359783" type="COMPANY" weightage="20" keywordseo="bajaj-auto">Bajaj Auto</keyword> and <keyword id="108831" type="COMPANY" weightage="20" keywordseo="TVS-Motor-Company">TVS Motor Company</keyword> soared on Wednesday after Finance Minister Nirmala Sitharaman's comment that the GST Council will consider the proposal to cut <keyword id="4613080" type="COMPANY" weightage="20" keywordseo="The-Goods-and-Services-Tax">the Goods and Services Tax</keyword> on two-wheelers. Addressing a <keyword id="6358345" type="COMPANY" weightage="20" keywordseo="cii">CII</keyword> conference on Tuesday, she said that the suggestion to lower tax on two-wheelers is a good one as this category is "neither a luxury nor a sin good" and hence merits a rate revision. Consequently, this will be taken up with the GST Council, she added. Around 10.48 a.m., shares of Hero MotoCorp were trading at Rs 3,095.40, higher by Rs 124.35 or 4.19 per cent from its previous close. It touched its 52-week high of Rs 3,124.95 per share during the initial trade. Shares of Bajaj Auto were trading at Rs 3,106.85, higher by Rs 96.85 or 3.22 per cent from its previous close. Similarly, TVS Motor Company's shares were trading 4.51 per cent higher at Rs 465.90 per share. Two-wheelers currently attract 28 per cent GST and the industry has for long demanded for the rate to be lowered.

Hero Moto, TVS Motor, Bajaj Auto shares rally as GST Council may consider tax cut

New Delhi, Jan 27 () Auto industry body SIAM on Monday urged the government to announce an incentive based scrappage policy ahead of the Budget, while also seeking a reduction in GST on BS-VI vehicles to 18 per cent.
Society of Indian Automobile Manufacturers (SIAM) also suggested Finance Minister Nirmala Sitharaman to increase budget allocation for internal combustion engine (ICE) bus procurement by state transport undertakings.
"As SIAM, we have urged the Finance Ministry to consider announcing an incentive based scrappage policy and also increase Budget allocation for ICE bus procurement by State transport undertakings," SIAM President Rajan Wadhera said in a statement.
He further said increased cost of BS-VI vehicles may effect demand.
"Hence, we have also requested government to reduce GST rates for BS-VI vehicles effective April 1 from 28 per cent to 18 per cent," Wadhera added.
From April 1, India will transition to stricter emission norm BS-VI from the current BS-IV. As per industry estimates, BS-VI vehicles are expected to be at least 10 per cent costlier.
The Indian auto industry has been going through a prolonged slump, recording its worst-ever sales decline in two decades in 2019, with an unprecedented slowdown hampering vehicle offtake across segments.
Overall, wholesale of vehicles during the year across categories, including passenger vehicles, two-wheelers and commercial vehicles, saw a decline of 13.77 per cent in 2019 at 2,30,73,438 units as against 2,67,58,787 units in 2018.
Seeking a turnaround in fortune, the auto industry has been seeking government support and reduce the burden of transition to BS-VI with lower GST rate. RKL BAL

SIAM seeks incentive based scrappage policy, GST rate cut on automobiles

New Delhi, Jan 27 () Auto component industry body ACMA on Monday sought uniform 18 per cent GST in the upcoming Budget.
Currently, about 60 per cent of auto components are at taxed at 18 per cent, while the remaining high value parts attract a duty of 28 per cent.
The auto component segment, which currently employs 50 lakh people and contributes 2.3 per cent to India's gross domestic product (GDP), also urged the government to come up with a fund to support R&amp;D and indigenous technology development.
"The automotive industry in India is undergoing a significant transformation due to new regulations and policy changes. On top of it, the economic slowdown has deterred domestic consumption, we hope that the forthcoming budget will help uplift both the consumer and industry sentiments," Automotive Component Manufacturers Association of India (ACMA) President Deepak Jain said in a statement.
To meet the government's vision of a USD 5 trillion economy by 2025, of which the manufacturing industry would be USD 1 trillion, it is critical that steps be taken to get the automotive industry back on track, he added.
"We are hopeful that the Government would consider our long-standing recommendation of 18 per cent GST on all auto components as also extend impetus to R&amp;D and indigenous technology development," Jain said.
The industry body also sought import duty exemption on auto component prototypes to encourage domestic R&amp;D and testing.
"Also retaining of weighted tax deduction on R&amp;D expenditure is critical. The 2016-17 Budget reduced weighted deduction benefit from 200 per cent to 150 per cent and has further restricted the deduction to 100 per cent from April 1, 2020," Jain said.
ACMA also urged the government to reintroduce investment allowance at 15 per cent for manufacturing companies that invest more than Rs 25 crore in plant and machinery. MSS
BAL

ACMA seeks uniform 18 pc GST, fund to support R&D

<ul><li>The sharp slump in car sales has squeezed profits in India’s auto sector, which employs 32 million people. </li><li>Half a million passenger vehicles worth $5 billion, are lying unsold at dealerships. </li><li>The automobile sector currently attracts 28% GST slab. </li><li>Seven of the top ten auto manufacturers like Maruti Suzuki, Tata Motors and Mahindra have announced factory shutdowns. </li></ul>The newly appointed Finance Minister Nirmala Sitharaman is mulling taking a few items off the list which attracts the highest tax under India’s goods and services tax (GST) regime. And, auto sector, which has been weighed down by piling inventory and sales slowdown, is most likely candidate, according to an <a href="https://economictimes.indiatimes.com/news/economy/policy/more-items-likely-to-go-off-highest-gst-slab/articleshow/69718462.cms">ET report</a>. Currently, the automobile sector attracts 28% GST along with personal-use aircrafts, lotteries and five-star hotels and unhealthy foods like aerated water. The sector <a href="https://www.bsmotoring.com/news/domino-effect-of-auto-crisis-livelihoods-indias-gdp-growth-may-take-hit/17095">employs around 32 million people</a> across the country, directly or indirectly, and has been the single-greatest engine of economic growth across the world. Any benefits that flow into the sector, trickles down to every sector. As the government looks to create employment, this sector which is capable of moving the growth engine, is seen as a favourite. Right now, the sector is facing shutdowns after a long spell of slowdown. This will have a much deeper effect on the employment in the sector which employs skilled and unskilled workers. As per the latest data, <a href="https://www.businesstoday.in/sectors/jobs/jobless-in-motown-employment-auto-industry-fell-2017-18/story/336097.html">hiring in the sector</a> went down by 2.5% in 2017-18 annual data. Unsold inventory at $5 bn According to<a href="https://economictimes.indiatimes.com/industry/auto/auto-news/auto-companies-slam-brakes-on-production/articleshow/69718548.cms"> an ET report</a>, seven of the top ten auto manufacturers like Maruti Suzuki, Tata Motors and Mahindra have announced factory shutdowns. Almost half a million passenger vehicles worth $5 billion, are lying unsold at dealerships. As many as 3 million two-wheelers valued at $2.5 billion are unsold too. Auto dealers too have been shuttering down as they are unable to move cars from the showrooms. In the slow lane For the month of April, the Indian auto sales declined by almost 16% annually, according to the Society of Indian Automobile Manufacturers (SIAM). All the segments like commercial and passenger vehicles, two wheelers moved to the red. The wholesale passenger vehicle sales segment went down by 17%, impacted by various factors. “Passenger vehicles sales volume declined due to the weak buyer sentiments on account of higher insurance premiums, the increase in fuel prices as well as the interest costs. Sales were also impacted by various regulatory changes in the industry such as BS-VI, FAME-II as well as alternate mobility. The lack of clarity on the policy front could lead to uncertainty in the demand pattern in 2019-20,” said a report by India Ratings on April sales volume. Little room for a cut The central government led by Narendra Modi, has to walk a tightrope this Budget. The country is on the verge of a slowdown as GDP growth is all set to be lower than the expected 7%. At the same time, their ability to provide sops is also low as tax collections have come in slowed down. The government tax receipts this year <a href="https://www.businessinsider.in/there-is-a-lot-of-bad-news-that-modi-has-to-budget-for-this-year/articleshow/69635372.cms">are 5% lower </a>than what they were last year, throwing government into cost savings mode. SEE ALSO: <a href="https://www.businessinsider.in/there-is-a-lot-of-bad-news-that-modi-has-to-budget-for-this-year/articleshow/69635372.cms" data-type="tilCustomLink">There is a lot of bad news that Modi Government has to budget for, this year</a>

With 32 million jobs at stake in India’s auto sector, the Modi government may ease tax burden on cars

New Delhi, Mar 3 () A parliamentary panel on Tuesday suggested lower GST rate for the automobile segment at least till the revival of the sector, and uniform road tax across all states against the backdrop of negative growth in the automobile production since July 2018. A parliamentary panel had examined the Demands for Grants 2020-21 of Department of Heavy Industry (DHI) and tabled its report in Parliament. The automobile industry in India is one of the largest and fastest-growing sector and constitutes 27 per cent of industrial gross domestic product (GDP) and 49 per cent of manufacturing GDP. It provides about 37 million direct and indirect jobs and 15 per cent of total GST collection amounting to Rs 1.5 lakh crore. "But, the committee observes that of late, there is a negative growth in the automobile production since July 2018," said the report. The committee noted that some of the factors that contributed to slowdown are non-availability of credit facility to consumers, stringent rules for loan sanction by banks, rise in price due to the upfront payment of third-party insurance for 5 years, introduction of BS-VI vehicles from April 2020; and higher rate of GST on automobiles and components. Amid slowdown in the sector, the committee, among other things, recommended to either suspend or postpone the upfront payment of insurance for 5 years for the time being and reduction in GST rate to a lower slab "at least till the revival of the auto sector". Further, it made a case for introduction of incentive-based scrappage policy for creating purchase demand for new vehicles, reduction in import duty on lithium-ion cell battery which is used for operating the e-vehicles and levy of uniform road tax across all states. The report said the committee "is pleased to note" that the Delhi-Chandigarh highway has been declared as the first e-vehicle friendly expressway of the country. It desires that other expressways, including Delhi-Jaipur and Mumbai-Pune expressways, may also be made completely e-vehicle friendly soon with charging infrastructure in place at regular and frequent intervals. RSN NKD HRS

Parliamentary panel suggests lower GST rate for auto sector

<keyword id="42747" type="CITY" weightage="100" keywordseo="Tata-Motors">Tata Motors</keyword> has announced its decision to reduce the prices of its passenger vehicles in a range of Rs 3300 to Rs 217000. "This will enhance the ease of doing business and usher in a new era for the economy in general and especially, for the automotive industry. Following the roll out of GST, we have decided to pass on the entire benefit to our customers. We are offering a price reduction of upto 12% ranging between Rs 3300 and Rs 217000 depending on the model and variant. With a strong focus to encourage positive buying sentiments, we have taken this step," said <keyword id="162478" type="PERSON" weightage="100" keywordseo="Mayank-Pareek">Mayank Pareek</keyword>, President, Passenger Vehicles Business Unit.

Tata Motors passes on GST benefits to customers; slashes prices by 12 %

<ul><li>Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> to head 35th edition of the <keyword id="3680839" type="PERSON" weightage="20" keywordseo="gst-council-meeting">GST council meeting</keyword>. </li><li><keyword id="6354553" type="COMPANY" weightage="20" keywordseo="real-estate">Real estate</keyword> sector expecting the government to change the <keyword id="6354679" type="DEFINITION" weightage="20" keywordseo="gst">GST</keyword> slab rate for cement </li></ul>With the 35th edition of GST council meeting beginning on June 21, the government is likely to take key decisions on reducing GST for electric cars, the revenue system of states, and the new return filing system. This will be the first meeting post general election in India. The real estate sector has high hopes from the first GST council meeting under the new government. At present, the GST rate slab for cement is 28% and the real estate sector is expecting their long-awaited demand of shifting it to the 18% slab. “By bringing the GST rate for cement into the 18% slab, the Government indirectly helps create more construction and development-related jobs, not only in the <keyword id="35061" type="DOMAIN" weightage="20" keywordseo="housing">housing</keyword> sector but also in the infrastructure industry. However, a reduced GST rate on construction materials like cement and steel would also result in increased financial strain in terms of overall revenue loss - perhaps not an ideal circumstance in a period of constrained economic growth,” said Anuj Puri, Chairman, ANAROCK Property Consultations Will homes get any cheaper? Even if the inputs costs of real estate sector do come down, experts wonder if they will actually aid the homebuyer. “This depends on whether the benefits of the reduced cost of raw materials is actually passed on to the consumers. It brings to mind a similar question related to home loan rates vis-a-vis RBI's announcement of repo rate reductions. The actual transmission of such reductions to home loan borrowers has been minimal, even though the RBI lowered its repo rates three consecutive times,” Puri said. Last year, cement rates actually come down on account of surplus production, but the rate cut in residential housing was never seen. However, there could be certain indirect benefits. Decrease in input costs will boost the supply pipeline, which can keep prices in check. The government’s dilemma There are many sectors other than real estate which are seeking possible change in GST slabs. The auto sector too is seeking relaxation as its sales are falling, by as much as 21% in May. This has led to a crisis in the sector where dealers <a href="https://www.businessinsider.in/passenger-car-sales-decline-sharply-in-april-on-back-of-low-demand/articleshow/69317716.cms">are shutting shops </a>and automakers are cutting production. As the GDP growth has fallen beyond expectations, the government might work on providing a stimulus to the sector. However, its tax revenues have also been falling, which means how much it can help the economy might come under question.

India's real estate developers want lower GST on cement-- but that is not going to make apartments cheaper

<ul><li><keyword id="6357252" type="UNKNOWN" weightage="20" keywordseo="Hero-MotoCorp">Hero Motocorp</keyword> announced its Q1 FY20 earnings, where the company saw a net profit of ₹1257 crores, up by 38%. </li><li>However, Hero has seen a decline in sales by 12.2% from the same quarter in FY19.</li><li>The company’s CFO appealed to the government to reduce the GST on two-wheelers from the current 28% to 18%.</li></ul>Hero Motocorp posted a net profit of ₹1,257 crore for the quarter ending June 2019, up 38% from last year’s ₹925 crore. Yet, the company is not happy. The slowing auto market has affected it sales too, which declined by 12.2% to 616,526, just for the month of June, as compared to the 704,562 units sold in the same month last year. "The overall economic and customer sentiments continued to be soft during the first quarter of this fiscal and their impact is clearly visible in the performance of the Auto sector, The outlook for the rest of the year will be dependent on multiple factors, including the progress of monsoon and festive season offtake, as well as improvement in liquidity,” said Niranjan Gupta, Chief Financial Officer, Hero MotoCorp. In the Q1, Hero has sold over 1.8 million motorcycles and scooters. In the same quarter of the previous year, Hero had announced its highest ever sales in a single quarter at – 2.1 million. 
 
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 Hero Motocorp had recently announced its foray into the electric vehicle segment. However, according to reports, the Pawan Munjal-led company will not be able to use its legacy brand name of Hero for EVs as his brother Naveen Munjal has the <a href="https://www.livemint.com/auto-news/family-pact-may-not-give-pawan-munjal-the-hero-brand-name-for-evs-1564079431571.html">rights </a>for the brand name Hero for Hero Electric. Gupta also said that it is important for the government to take urgent steps to boost consumption. “We would, therefore, reiterate our appeal to the government to bring down the GST on two-wheelers to 18% from the current level of 28%, in order to provide the much-needed relief to the sector. A reduction in GST will lower the cost of the two-wheeler and spur demand, with the consequent growth in volumes offsetting any impact on the government revenue,” said Gupta.

Hero Motocorp wants government to take ‘urgent steps’ to help recover falling sales

In order to pass down the benefits of goods and services tax (<keyword id="6354679" type="ORGANIZATION" weightage="100" keywordseo="GST">GST</keyword>) to the end users, two-wheeler major <keyword id="108831" type="COMPANY" weightage="100" keywordseo="TVS-Motor-Company">TVS Motor Company</keyword> has slashed prices of its models by up to Rs 4,150. "The price reduction is in the range of Rs 350 to Rs 1,500 in the commuter segment. In the premium segment products, the prices are reduced up to Rs 4,150 depending on each state," said a statement from the motor company. It added that dealers will be provided with required assistance on the opening stock as on July 1, 2017, that they had purchased at a pre-GST price. Dealing in a range of categories like scooters, motorcycles, mopeds and three wheelers, TVS recently partnered with Abans Auto of Sri Lanka, after which it would be able to export TVS King to the Sri-Lankan market. For the quarter ended March 31, 2017, TVS had registered a net profit of Rs 126.77 crore, a 6.80% decline when compared to Rs 136.03 crore in the corresponding quarter last year. Another leading motor maker <keyword id="6357252" type="COMPANY" weightage="100" keywordseo="Hero-MotoCorp">Hero MotoCorp</keyword> has announced a reduction in prices by up to Rs 1,800 after GST, following several other automakers like <keyword id="44883" type="CITY" weightage="100" keywordseo="Maruti-Suzuki">Maruti Suzuki</keyword>, Toyota and <keyword id="42034" type="COMPANY" weightage="100" keywordseo="Jaguar">Jaguar</keyword> Land Rover. (Image source RushLane)

Two-wheeler major TVS reduces prices post GST

New Delhi, Jan 12 () In middle of a prolonged slowdown, the automobile industry has asked the government to take bold fiscal measures to revive the sector that has reported its worst-ever sales decline in two decades during 2019, industry sources said.
 In the upcoming Union Budget, the auto industry has sought measures, such as reduction in GST rates on vehicles and abolition of duty on import of lithium-ion battery cells, to encourage electric mobility.
 The industry, which has been facing a downturn for almost a year now, has also sought an incentive-based scrappage policy and an increase in re-registration charges of vehicles to discourage use of old vehicles.
 Sources said that the introduction of BS-VI emission norms is a positive step to reduce emissions significantly but the initiative would lead to an 8-10 per cent increase in vehicle cost, leading to enhanced GST collections for government.
 "However, this extra cost would lead to a fall in demand. As a win-win situation, we are requesting the government to consider reducing GST on BS-VI vehicles to 18 per cent from the current 28 per cent from April onwards," an industry source said.
 The decision-making power for GST reduction lies with the GST Council and not related to the Budget directly but this is an important element for demand revival, he added.
 The auto industry is also scrapping duty on import of lithium-ion battery cells so that battery packs can be manufactured locally and progressively cell manufacturing can also be established in the country.
 It would also help in reducing cost of electric vehicles and aid in accelerating adoption of green mobility in the country, another source said.
 He added that a formal incentive-based scrappage policy with monetary support from the government as well as manufacturers is required to take old vehicles off the roads and generate demand for new vehicles.
 "Incentive in the form of 50 per cent tax rebate in GST, road tax and registration charges is proposed," the source noted.
 The industry has also sought adequate Budget allocation for the Ministry of Urban Development to support state transport undertakings in procuring buses.
 "Robust public transportation will reduce the number of vehicles on the road, thereby will reduce pollution and hence positively impact climate change. This would also lead to reviving demand for commercial vehicles which is very much needed in the current economic scenario," the source said.
 Besides, the industry has asked increase in depreciation rate on passenger vehicle and two-wheelers to 25 per cent to have depreciation aligned to real useful life of the vehicle.
 Similarly, it has asked the government to permanently withdraw the proposed hike in the vehicle registration fee as a higher fee would further impact the demand negatively.
 "Besides, we are seeking income tax benefits on the interest part of vehicle loan to be provided to individuals purchasing green vehicles," the source noted.
 The automobile industry recorded its worst-ever sales decline in two decades in 2019, with an unprecedented slowdown hampering vehicle offtake across segments.
 According to data released by the Society of Indian Automobile Manufacturers (SIAM) last week, all vehicle segments reported de-growth last year as low consumer sentiments, weak rural demand and economic slowdown took toll on demand.
 Overall wholesale of vehicles during the year across categories, including passenger vehicles, two-wheelers and commercial vehicles, saw a decline of 13.77 per cent in 2019 at 2,30,73,438 units as against 2,67,58,787 units in 2018.
 This is the worst fall in sales since the industry body started recording monthly and yearly sales data in 1997. The previous lowest was recorded in 2007 when overall sales had declined by 1.44 per cent. MSS HRS

You Searched For "auto gst" and got 13 results

Slash GST on Auto LPG, address policy issues stalling growth: Industry body to FM

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COVID-19: SIAM seeks GST rate cut, incentive based scrappage policy to revive auto sector

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Auto stocks recover after Gadkari clarifies his '10% additional GST on diesel vehicles' comment

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Hero Moto, TVS Motor, Bajaj Auto shares rally as GST Council may consider tax cut

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SIAM seeks incentive based scrappage policy, GST rate cut on automobiles

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ACMA seeks uniform 18 pc GST, fund to support R&D

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With 32 million jobs at stake in India’s auto sector, the Modi government may ease tax burden on cars

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Parliamentary panel suggests lower GST rate for auto sector

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Tata Motors passes on GST benefits to customers; slashes prices by 12 %

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India's real estate developers want lower GST on cement-- but that is not going to make apartments cheaper

BI India Bureau

Hero Motocorp wants government to take ‘urgent steps’ to help recover falling sales

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Two-wheeler major TVS reduces prices post GST

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