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<ul><li>The <keyword id="15478236" type="General" weightage="20" keywordseo="budget-2024" source="Orion">Budget 2024</keyword> will be tabled by the finance minister Nirmala Sitharaman on July 23.</li><li>The <keyword id="20081557" type="General" weightage="20" keywordseo="auto-industry" source="keywords">auto industry</keyword>’s expectations from the Budget 2024 include FAME 3 scheme, incentives for hybrids and more.</li><li>Here are the key expectations from the auto industry for the Budget 2024.</li></ul> The Budget 2024 is set to be tabled on July 23 by the finance minister Nirmala Sitharaman and like each sector, the Indian auto industry also has set a lot of expectations from the Narendra Modi-led government’s first budget of its third term. From a boost to electric vehicles to infrastructure development, the auto sector has a series of expectations that it hopes will be addressed in the upcoming budget. This article delves into the key budget expectations of the auto industry in India <h2>FAME 3 scheme</h2>The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME 2) has been integral for the electric vehicle (EV) makers as it has helped keep EVs affordable for the common man. With the government<a href="https://www.businessinsider.in/business/auto/news/government-is-reportedly-reworking-the-fame-ii-scheme-to-ensure-companies-use-domestic-components/articleshow/93752352.cms"> reworking</a> the FAME 2 scheme and then<a href="https://www.businessinsider.in/business/auto/news/electric-scooters-get-a-price-hike-of-up-to-16000-as-fame-subsidy-ends/slidelist/109136771.cms"> ending the scheme</a>, the prices of EVs have increased. <div type="Article" hostid="261" msid="111573138" title="Union Budget 2024: When will it be presented, what time, where to watch and what are various sectors expecting?" mstype="2" mssubtype="0"></div> With Budget 2024, EV makers will look towards the government for the FAME 3 scheme. The government is expected to announce the FAME 3 scheme with an outlay of ₹10,000 crore. While the exact details of the scheme will only be known once the budget is announced, it will be aimed at boosting demand by subsiding the cost, while also promoting local manufacturing of key components. “In the upcoming budget, we advocate for initiatives and subsidy structures without segment caps which will in turn foster innovation and growth across multiple segments. Recent discussions surrounding the implementation of FAME 3 present a notable opportunity to enhance EV adoption in India,” said Niraj Rajmohan, CTO and Co-Founder, Ultraviolette. "Proposed measures to promote e-buses and enhance payment security are crucial for accelerating sustainable transportation. Comprehensive support for the entire EV ecosystem is essential. Anticipated policy reforms like FAME-III and increased funding for critical EV segments will foster holistic industry growth," said Kartikey Hariyani, Founder and CEO, Charge Zone. <h2>Petrol and diesel under GST</h2>One of the frequent demands recently has been to bring petrol and diesel under goods and services tax (GST) to bring the fuel prices under control. Oil Minister Hardeep Singh Puri has said that the government will try to bring petrol and diesel under GST. At present, the central government levies excise duty on petrol and diesel, while the state government imposes value-added tax (VAT) and sales tax. <h2>Incentives for hybrids</h2>While electric vehicles have long been subsidised by both state and central governments, hybrids have not received the same love. Union Minister Nitin Gadkari had earlier this year<a href="https://www.businessinsider.in/business/auto/news/gadkari-vows-to-eliminate-petrol-diesel-vehicles-in-india-bats-for-lower-tax-for-hybrid-cars/articleshow/108936085.cms"> pitched</a> for lower GST on hybrid vehicles. “The proposal to reduce GST on hybrid vehicles to 5% and to 12% for flex engines has been sent to the Finance ministry which is considering the requisition,” Gadkari said. Companies like Maruti Suzuki have a strong presence in hybrids and have a lot to gain from incentives, while companies like Tata Motors who do not have hybrid technology may take a hit on EV sales. With the government looking to reduce dependence on petrol and diesel cars, hybrids may finally get some incentives in the upcoming budget. The UP government has already started offering incentives to select hybrid cars. <h2><keyword id="22433272" type="General" weightage="20" keywordseo="vehicle-scrapping" source="keywords">Vehicle scrapping</keyword></h2>Industry bodies such as the Society of Indian Automobile Manufacturers (SIAM) have sought incentives for vehicle scrapping. These are vehicles that have crossed a certain age and are being scrapped keeping in mind the pollution. While a policy is already in place, the stakeholders are looking for increased incentives, especially for commercial vehicles such as trucks and buses, which account for most of the emissions. <h2>PLI scheme</h2>Automakers are also looking for increased incentives under the Production Linked Incentive (PLI) scheme, for both ICE and EVs. Companies want the scheme to be expanded to more components, including tyres, which have seen a lot of changes. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/the-biggest-ipos-in-indias-history-lic-to-paytm-companies-that-have-raised-the-most-funds/articleshow/111690863.cms">The biggest IPOs in India’s history – LIC to Paytm, companies that have raised the most funds</a> <a href="https://www.businessinsider.in/business/auto/news/its-raining-discounts-maruti-suzuki-hyundai-tata-motors-and-others-offer-discounts-on-cars-as-sales-slowdown/articleshow/111688501.cms">It’s raining discounts – Maruti Suzuki, Hyundai, Tata Motors and others offer discounts on cars as sales slowdown</a> <a href="https://www.businessinsider.in/business/news/zomato-and-swiggy-increase-platform-fee-by-20-food-deliveries-to-get-costlier/articleshow/111758782.cms">Zomato and Swiggy increase platform fee by 20% – food deliveries to get costlier</a>

Budget 2024 Expectations: FAME scheme, aid for vehicle scrapping and other expectations of the auto industry

<ul><li>The <keyword id="19955368" type="General" weightage="100" keywordseo="Budget-2024" source="keywords">Budget 2024</keyword> will be tabled by the finance minister Nirmala Sitharaman on July 23.</li><li>The tech and electronics industry’s expectations from the Budget 2024 include a push for localisation, <keyword id="20335594" type="General" weightage="20" keywordseo="reduced-GST" source="keywords">reduced GST</keyword> and more.</li><li>Here are the key expectations from the tech and electronics industry from Budget 2024.</li></ul> The Budget 2024 is set to be tabled on July 23 by the finance minister Nirmala Sitharaman and like each sector, the Indian tech and electronics industry is ready with its list of expectations from the Narendra Modi-led government in the upcoming budget. The Indian government has been pushing for an increase in electronics manufacturing in India with schemes like Make in India and the Production Linked Incentive (PLI) scheme. This article delves into the key budget expectations of the tech and electronics industry in India. <h2><keyword id="19869633" type="General" weightage="20" keywordseo="Budget-2024-expectations" source="Orion">Budget 2024 expectations</keyword></h2>In the last budget, the government had reduced taxes on key smartphone components such as camera lenses and lithium-ion batteries. This move was aimed at boosting smartphone production in India and bringing the costs down. Companies and consumers both will hope for similar boosts in the upcoming budget as well. <div type="Article" hostid="261" msid="111573138" title="Union Budget 2024: When will it be presented, what time, where to watch and what are various sectors expecting?" mstype="2" mssubtype="0"></div> The <keyword id="19981334" type="General" weightage="20" keywordseo="PLI-scheme" source="keywords">PLI scheme</keyword> has played a key role in boosting domestic production in various sectors. The introduction of a revamped PLI scheme for the manufacture of various consumer technology products such as smartphones, laptops, wearables and more will give a good boost to domestic production. “Guided by Aatmanirbhar Bharat, we seek government support for extensively localizing component production, fostering a lucrative environment where homegrown brands can lead globally. Incentivizing domestic production through tax breaks, subsidies, and R&amp;D funding will enhance India's manufacturing capabilities,” said Amit Khatri, co-founder, Noise. Industry leaders are hoping for steps aimed at boosting the disposable income of consumers. “Higher disposable incomes will lead to a promising growth impetus. We look forward to a budget that will create a stable and growth-oriented tax environment, which will help in ease of doing business, and will lead to increased economic activity and demand generation,” said Pradeep Bakshi, chief executive officer, Voltas. Companies are also hoping for simplified GST rules and reduced GST rates. In one such instance, TV makers are hoping for a reduced GST rate for TVs sized above 32 inches. “One expected move is reducing the GST rate on LED TVs larger than 32-inches from 28% to 18%. This change aims to boost consumer spending in the electronics sector. Expanding PLI schemes to include smart TVs, refrigerators, and washing machines is also important for market growth and improving manufacturing capabilities,” said Avneet Singh Marwah, chief executive officer, Super Plastronics. In addition to measures aimed at boosting domestic production, companies are also hoping for antidumping duties to ensure fair competition with Chinese companies. "While the government has made significant strides in supporting Indian manufacturers through initiatives like the 'Made in India' campaign and the PLI scheme, there is a pressing need to level the competitive playing field. Anticipations include measures such as antidumping duties to ensure fair competition against Chinese and other international companies in the industry,” said Imran Kagalwala, co-founder, UNIX India. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/economic-survey-2024-public-sector-investment-drives-infrastructure-growth-but-private-investment-needed/articleshow/111927594.cms">Economic Survey highlights public sector investment's role in driving infra growth; Underlines need for private sector to step up</a> <a href="https://www.businessinsider.in/budget/news/budget-2024-expectations-fame-scheme-aid-for-vehicle-scrapping-and-other-expectations-of-the-auto-industry/articleshow/111783199.cms">Budget 2024 Expectations: FAME scheme, aid for vehicle scrapping and other expectations of the auto industry</a> <a href="https://www.businessinsider.in/budget/news/budget-2024-key-sustainability-and-energy-initiatives-that-indian-government-plans-to-implement-this-year/articleshow/111917956.cms">Budget 2024: Key sustainability and energy initiatives that Indian government plans to implement this year</a>

Budget 2024 expectations – PLI scheme to GST reduction, budget expectations from the tech industry

India’s electric vehicle (EV) sector, often seen as a key player in the country’s clean energy transition, has been called “irrelevant” without government <keyword id="20231384" type="General" weightage="20" keywordseo="incentives" source="keywords">incentives</keyword> by a recent Bernstein research report. The report highlights the serious challenges automakers face in achieving profitability and scaling operations in the EV segment, which remains heavily reliant on financial support from the government. <h2>Struggling to achieve profitability</h2>The Bernstein report reveals that generating profitable margins in the Indian EV sector is proving to be an uphill battle for automakers. “It is tough to generate sufficient margins and get scale in EVs. Even with hefty incentives, incumbent OEMs are still unprofitable,” the report stated. This underscores the fact that even with <keyword id="20022183" type="General" weightage="20" keywordseo="government-subsidies" source="keywords">government subsidies</keyword> aimed at promoting <keyword id="20138204" type="General" weightage="20" keywordseo="electric-mobility" source="keywords">electric mobility</keyword>, automakers are struggling to make EVs financially viable. High production costs, limited infrastructure, and relatively low consumer demand all contribute to this issue. Traditional automakers, particularly in India’s two-wheeler market, are facing significant financial losses. According to Bernstein, while some niche startups may survive, their long-term market share will likely remain limited, and competition will primarily be between established original equipment manufacturers (OEMs). The key challenge for these OEMs is achieving the scale and cost reductions required to compete with the well-entrenched internal combustion engine (ICE) sector. <h2>Reliance on incentives</h2>One of the most striking conclusions from Bernstein’s analysis is the deep reliance of the EV sector on government subsidies. Without these incentives, the <keyword id="19952060" type="General" weightage="100" keywordseo="EV-Industry" source="keywords">EV industry</keyword> would be unable to compete with traditional ICE vehicles. “The EV Industry is not relevant without incentives currently, and to break the ICE sector, it needs intense focus, scale, and continued cost downs,” the report emphasised. This indicates that while government schemes like GST benefits have helped reduce the cost difference between EVs and ICE vehicles, they are not enough to ensure the long-term sustainability of the EV sector. Bernstein estimates that the overall EV two-wheeler industry in India generates around USD 1.3 billion in annual revenues, but without government support, the sector incurs an EBIT loss of approximately USD 300-400 million. The high cost structure of EVs, combined with the relatively low sales volumes, makes it difficult for companies to operate without subsidies. <h2>Established players face mixed fortunes</h2>Among India’s leading two-wheeler manufacturers, Bernstein noted that <keyword id="19897354" type="General" weightage="20" keywordseo="Bajaj-Auto" source="keywords" meta.keywordsubtype="org" meta.entityname="Bajaj Auto" meta.hostid="265" meta.entityid="Bajaj Auto">Bajaj Auto</keyword> and <keyword id="20326963" type="General" weightage="20" keywordseo="TVS-Motors" source="keywords" meta.keywordsubtype="org" meta.entityname="TVS Motors" meta.hostid="265" meta.entityid="TVS Motors">TVS Motors</keyword> are on a similar footing in terms of their performance in the EV space. Bajaj Auto received an "Outperform" rating from Bernstein due to its lower valuations, while TVS Motors was rated "Market Perform" after it was found to be losing approximately 7.5% in EBITDA, or Rs 11,000 per vehicle, despite generating a gross profit margin of 7% without subsidies. <div type="Article" hostid="261" msid="113631992" title="Tata Nexon EV with a bigger battery launched starting at ₹13.99 lakh" mstype="2" mssubtype="0"></div>Hero MotoCorp, a major player in India’s automotive market, lags behind both Bajaj and TVS in terms of its EV offerings. Bernstein also pointed out that Eicher Motors, which is expected to launch its own <keyword id="19895203" type="General" weightage="20" keywordseo="electric-vehicles" source="keywords">electric vehicles</keyword> soon, is likely to remain “sub-scale and less relevant” in the competitive EV landscape. Interestingly, <keyword id="19897349" type="General" weightage="20" keywordseo="Ola-Electric" source="keywords" meta.keywordsubtype="org" meta.entityname="Ola Electric" meta.hostid="265" meta.entityid="Ola Electric">Ola Electric</keyword> (Ola-E) stands out as a startup that has been able to generate positive operating earnings (EBITDA) from its premium models like the S1 Pro and S1 Air, even as it incurs losses on its mass-market model, the S1X. “Our analysis indicates that Ola-E is generating positive operating EBITDA from its premium models, such as the S1 Pro and S1 Air while incurring a loss on its mass-market model, the S1X,” the report said. While Ola has shown some promise, it too remains heavily dependent on subsidies to maintain its financial health. <h2>Long-term outlook</h2>Bernstein’s report paints a challenging picture for the future of India’s EV sector, suggesting that while dominant startups may survive, the majority of the competition will come from traditional automakers. However, without significant scale and continued cost reductions, the EV industry will struggle to become self-sustaining. <div type="Article" hostid="261" msid="113315022" title="Waiting for the festive season to buy an EV? Cabinet approves PM E-Drive subsidising most EVs, sans electric cars" mstype="2" mssubtype="0"></div>Bernstein emphasised that to truly compete with ICE vehicles, the EV sector needs to focus on scaling up operations, reducing costs, and maintaining long-term commitment. Until these conditions are met, India’s EV industry will remain highly dependent on government support and may continue to face an uphill battle for relevance. In conclusion, while India’s EV sector is seen as a vital part of the country’s clean energy future, Bernstein’s analysis highlights that it is far from being self-reliant. The industry’s heavy dependence on government incentives raises questions about its long-term sustainability and relevance, particularly in the face of ongoing challenges with profitability and scale. (With inputs from ANI)

Why has Bernstein called India’s EV sector 'irrelevant'?

<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

<ul><li>Entry-level passenger vehicle segment has fewer buyers, suggesting that customers at the bottom of the pyramid are still hesitant to upgrade from 2-wheelers to 4-wheelers </li><li>For the first time in eight months, passenger vehicles witnessed a Y-o-Y degrowth. </li><li>The 2-wheeler industry is facing challenges as the demand for entry-level vehicles decreases. </li><li><keyword id="354719" type="General" weightage="100" keywordseo="fada" source="Orion">FADA</keyword> has adopted a cautious stance for the month of May due to unfavourable weather conditions.</li></ul> The retail performance of vehicles in April marks a slow start to FY2024, with a 4% decline in total vehicle retails. Two-wheelers and passenger vehicles led the declines, according to data released by Federation of Automobile Dealers Associations of India. Despite a healthy year-on-year (Y-o-Y) growth of 57% in 3-wheelers and marginal growth of 1% and 2% in tractor and commercial vehicles respectively, 2-wheelers faced a setback, declining by 7%. In April, the passenger vehicle (PV) segment experienced a slowdown with a 1% Y-o-Y decline in retail sales, after achieving record sales in FY 2023. The decline was attributed to a high base from the previous year and the implementation of OBD 2A norms, which caused an increase in vehicle prices and prompted advanced purchases in March. OBD 2A refers to on-board diagnostics 2nd generation type A, which is a set of regulations implemented by the Indian government to reduce vehicular pollution. “Entry-level PVs have fewer buyers, suggesting that customers at the bottom of the pyramid are still hesitant to upgrade from 2-wheelers to 4-wheelers,” said <keyword id="14931734" type="General" weightage="50" keywordseo="manish-raj-singhania" source="Orion">Manish Raj Singhania</keyword>, president, FADA. 2-wheeler segment continues to struggle The 2-wheeler segment continues to struggle, down by 19% compared to pre-Covid April 2019, and contributing to a 12% decline in total vehicle sales. Unfavourable weather conditions, including untimely rains and hailstorms, caused crop damage in several states in April, aggravating farmer concerns and potentially impacting entry-level 2-wheeler and passenger car sales. “The 2-wheeler segment's continued low sales, with a 7% YoY decrease, can be attributed to limited supplies due to the OBD 2A shift, untimely rains, and pre-buying in March. Model mix availability, rural sentiment, and demand in the 2-wheeler motorcycle segment remain weak. The rural economy has yet to show significant progress,” said <keyword id="1114" type="General" weightage="50" keywordseo="singhania" source="Orion">Singhania</keyword>. Inclement weather conditions likely to impact May sales The 2-wheeler industry is facing challenges as the demand for entry-level vehicles decreases. FADA said it has requested the <keyword id="6355040" type="General" weightage="50" keywordseo="gst-council" source="Orion">GST Council</keyword> to consider reducing the <keyword id="6354679" type="General" weightage="50" keywordseo="gst" source="Orion">GST</keyword> on 2-wheelers from 28% to 18% to revive this important segment, which makes up 75% of total auto sales. However, there is hope that the upcoming wedding season in May will lead to a sales resurgence due to increased customer interest. Additionally, as electric vehicles (EVs) become more popular, customers are considering switching from internal combustion engines (ICE) to EVs, which may delay their purchasing decisions temporarily, FADA said. The demand for medium and heavy commercial vehicles (M&amp;HCV) in the commercial vehicle (CV) segment is growing rapidly, thanks to the active infrastructure development projects across the country. The segment's growth is also attributed to better supply of products from original equipment manufacturers (OEMs) and customers' willingness to adapt to changes in pricing. Concerns are being raised regarding the increasing inventory levels in the PV segment. FADA has requested original equipment manufacturers (OEMs) to re-evaluate their inventory and prioritise production and supply of products that are in demand to ensure a better alignment between market demand and available inventory. This move will benefit both customers and manufacturers alike. Although the market conditions are somewhat sluggish, and there is a shortage of chips, the upcoming marriage season in May is expected to provide a slight boost in sales for the current month. Unfavourable weather conditions, including untimely rains and hailstorms, are causing crop damage in multiple states. This is worsening the concerns for farmers and has the potential to impact sales of entry-level 2-wheelers and passenger cars. In light of these factors, FADA has adopted a cautious stance for the month of May. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/go-first-suspends-sale-of-tickets-till-may-15-dgca-asks-airline-to-process-refunds-for-passengers/articleshow/99982706.cms">Go First suspends sale of tickets till May 15; DGCA asks airline to process refunds for passengers</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/go-first-flight-cancellations-make-summer-travel-and-vacations-expensive/slidelist/99983101.cms">Go First flight cancellations make summer travel and vacations expensive</a>

Retail vehicle sales decline 4% in April, says FADA as it remains cautious about May

<ul><li>The Indian government is reportedly all set to increase <keyword id="6354679" type="General" weightage="80" keywordseo="gst" source="Orion">GST</keyword> on online gaming to 28%, a proposal that could spell trouble for the industry and players alike. </li><li>The online gaming industry is expected to cross $5 billion valuation by 2025, but the taxman’s greed could kill the golden-egg laying hen. </li><li>Experts are worried about the impact this could have on the industry – both the players and the businesses, which are still in their early days. </li></ul>The Indian government is reportedly all set to tax casinos, online gaming and horse racing at the highest slab of GST – 28%. Looks like the taxman is intent on treating these recreational activities and skills on par with tobacco, cigarettes, <a href="https://www.businessinsider.in/cryptocurrency/news/28-gst-on-crypto-transactions-india-is-reportedly-mulling-another-tax-levy-next-week/articleshow/92407767.cms">cryptocurrencies</a> and luxury cars. Online betting, gambling, casinos and horse racing have long been treated ‘unfairly’ by the Indian taxman – while GST has been considerably moderate at 18% until now. Winnings and other income earned from these activities have been taxed at the highest rate of 30% without any deductions whatsoever. Now, a new <a href="https://economictimes.indiatimes.com/news/economy/policy/28-gst-likely-on-casinos-online-gaming-horse-races-on-gross-revenue/articleshow/92474293.cms?from=mdr">report</a> suggests that the government is mulling increasing the GST rate to 28% – the highest in effect currently. This will be applicable on compulsory food and beverages as well, driving up the costs for businesses and participants. <div type="Article" hostid="261" msid="92356710" title="INTERVIEW: The big picture on 5G, Big Tech-telco war with COAI’s Dr SP Kochhar" mstype="2" mssubtype="0"></div> <cmsannotation type="cmsannotation" annotationid="Fantasies are taxed too, and that too doubly" comment="subhead" text="Fantasies are taxed too, and that too doubly">Fantasies are taxed too, and that too doubly</cmsannotation> The government proposal says that GST will be charged on the gross revenue, not the net value added, which goes against both global tax ethics – as well as the very foundation of the GST regime, which intends to remove the undesirable double taxation effect. "Taxing online gaming, horse racing, and casinos at gross revenue instead of net value addition would be a departure from the global tax ethics," Rajat Mohan, senior partner, AMRG &amp; Associates told PTI. This could have an adverse impact on the entire industry. For instance, the online gaming sector which includes the likes of MPL, Zupee, Winzo and other startups, is expected to cross $5 billion in valuation by 2025, according to a <a href="https://www.ibef.org/blogs/india-s-nascent-gaming-industry-on-the-rise">IBEF report</a>. The government earned nearly ₹1,500 crore from fantasy sports in the form of taxes in FY21. A Deloitte report says that the combined industry contribution could cross a whopping ₹16,000 crore cumulatively over the next two years. And the taxman believes that he found a goose which lays golden eggs. <cmsannotation type="cmsannotation" annotationid="The costly game of confusion" comment="subhead" text="The costly game of confusion">The costly game of confusion</cmsannotation> The online gaming industry has been plagued by the ambiguous nature of government’s tax policies. The taxman has often been said to be confused about the nature of online games – whether those involve skills or are just gambling. It might be justified to tax gambling at the highest rate of tax, but experts believe that punishing games of skill in the same manner is unfair. To make matters worse, the government wants to raise the tax from 18% to 28%. <cmsannotation type="cmsannotation" annotationid="Mukesh Ambani, Rakesh Jhunjhunwala and more, to be affected" comment="subhead" text="Mukesh Ambani, Rakesh Jhunjhunwala and more, to be affected">Mukesh Ambani, <keyword id="6398943" type="General" weightage="80" keywordseo="rakesh-jhunjhunwala" source="Orion">Rakesh Jhunjhunwala</keyword> and more, to be affected</cmsannotation> This can also have an adverse impact on telcos, which are banking on online gaming as a new revenue stream as the industry seems to be entering a phase of stagnation. “Rather than being just the pipe, telcos like Jio (RIL owned) and Bharti are focusing on gaming as an incremental source of ad/subscription revenue. In fact, RIL believes that gaming in India will be bigger than music, movies and television shows put together,” said a report by Bank of America Securities. This could also impact <keyword id="201442" type="General" weightage="50" keywordseo="delta-corp" source="Orion">Delta Corp</keyword>, the only listed casino operator in the country which has seen its fortunes fade away, with even Rakesh Jhunjhunwala paring down his holdings in the company considerably. <div type="javascript" title="Custom" contenttype=""><cdata><![CDATA[]]></cdata></div> “This would be a distress the business model to a great extent as the touted super tax will have to be funded either by the platform, who do not make that kind of money in this business or would go on to reduce the prize pool size – effectively bringing down the interest in customer engagement,” Adarsh Somani, senior partner at ELP Law, told Business Insider India. This would wreak havoc on the gaming industry, and even if the government wants to reduce difficulties by offering a single – but higher – rate of tax, the valuation methodology will have to be made clear, Somani added. As things stand today, there is plenty of ambiguity that will have to be worked out by the government – even a small misstep could spell a lot of trouble for the gaming industry and its participants. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/auto-and-finance-stocks-can-bounce-back-even-if-the-market-crashes-in-july/articleshow/92436186.cms">Auto and finance stocks can bounce back even if the market crashes in July</a> <a href="https://www.businessinsider.in/finance/news/rbi-kept-the-rupee-exceptionally-stable-so-far-and-the-tide-could-turn-for-the-better-say-experts/articleshow/92414356.cms">RBI kept the rupee ‘exceptionally’ stable so far, and the tide could turn for the better say experts</a> <a href="https://www.businessinsider.in/business/telecom/news/interview-the-big-picture-on-5g-big-tech-telco-war-with-coais-dr-sp-kochhar/articleshow/92356710.cms">INTERVIEW: The big picture on 5G, Big Tech-telco war with COAI’s Dr SP Kochhar</a>

India is betting on casinos, online games and horse races to fill its coffers

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

<ul><li>Auto leaders are looking for GST cuts in the upcoming <keyword id="6358021" type="ORGANIZATION" weightage="20" keywordseo="budget">budget</keyword>, especially as they transition to BSVI. </li><li>Experts think that <keyword id="6354973" type="UNKNOWN" weightage="20" keywordseo="electric-vehicles">Electric Vehicles</keyword> will continue to be a point of focus for subsidies in the <keyword id="34478" type="PERSON" weightage="20" keywordseo="auto-industry">auto industry</keyword>.</li><li>The auto sector which has been caught in a slowdown is looking forward to reliefs in the upcoming budget.</li></ul>The upcoming <keyword id="7836802" type="UNKNOWN" weightage="20" keywordseo="Budget-2020">Budget 2020</keyword> is very crucial for auto manufacturers who are desperately seeking a push from the government. The sector which is caught in throes of a slowing economy, is hoping the Finance Minister can break the vicious cycle of falling sales and steeper discounts. As BSVI comes in, GST cuts a need of the hour On the top of the many requests of the sector is a GST cut. According to a PTI report, industry leaders have asked for GST cuts from April onwards as newer vehicle emission norms of BSVI come into play. “As a win-win situation, we are requesting the government to consider reducing GST on BS-VI vehicles to 18% from the current 28% from April onwards," said <a href="https://www.businessinsider.in/business/news/auto-industry-seeks-bold-fiscal-measures-in-the-budget-to-revive-growth/articleshow/73211788.cms?src=hp_biz">the report.</a> The transition to BSVI vehicles is one of the reasons for its lacklustre sales, as consumers wait for newer models. Meanwhile, for auto manufacturers newer norms would mean high priced inventory transition as well. “The Industry has already been very vocal in seeking concession in GST. Industry leaders have also been advocating for auto to be excluded from categories (like alcohol and tobacco) which qualify for sin tax and therefore increase the overall tax burden in the sector,” said Vinay Raghunath, Partner at E&amp;Y. Raghunath says that the auto sector in India is a key contributor to industrialization and GDP growth, reforms are necessary. “It will be important for the government to allay the fears of OEMs when it comes to sudden changes in the regulatory and tax regimes (eg: registration, insurance etc.) which may further impact the already weak consumer sentiment,” said Raghunath. We are champions not sinners, say auto company heads Industry leaders haven’t been shying away from seeking relief. In December 2019, Bajaj group head Rahul Bajaj <a href="https://www.businesstoday.in/current/economy-politics/rahul-bajaj-takes-on-amit-shah-says-corporates-live-in-fear-cannot-criticise-modi-govt/story/391315.html">questioned</a> the government. “There is no demand and no private investment, so where will growth come from? It doesn’t fall from the heavens. The auto industry is going through a very difficult period. Cars, commercial vehicles and two-wheelers are going through a rough patch,” Bajaj said. Others too have been speaking out. Anand Mahindra, chairman of the Mahindra group who is vocal on Twitter too spoke about the need for reforms in the upcoming budget. <div type="twitter" handle="anandmahindra" handlename="anand mahindra" image="http://pbs.twimg.com/profile_images/1053583782584807425/-7IRmY5u_normal.jpg" favoritecount="7433" retweetcount="1166" status="So with a forecast rate of growth of 5% for our GDP in ‘19-‘20 we’ll fall behind them again? This should get our co… https://t.co/2k0HPPRCOy" createdat="1578893166000" id="1216592233027293184"></div>

 "Since 7 percent of the gross domestic product (GDP), 16 percent of the goods and services tax (GST) collection and 50 percent of the manufacturing comes from auto industry – the government should treat this as a champion industry rather than a sin industry and support it in terms of lowering the cost of acquisition and also through some financial means then it would be great,” Shashank Srivastava, senior executive director at Maruti Suzuki told<a href="https://www.cnbctv18.com/auto/budget-2020-maruti-expects-govt-to-treat-auto-sector-as-a-champion-industry-than-a-sin-industry-5053441.htm"> CNBC Tv18.</a> What the government has done so far In August 2019, Finance Minister Nirmala Sitharaman brought in some much needed changes for the auto industry. “BS-IV vehicles purchased until March 30, 2020 will be allowed to run on the roads for the duration of the registration," she said. Any vehicle that is bought until March 2020 will be eligible for 30% depreciation, twice that of the then rate of 15%, she said. During the Union Budget presented in July 2019, Sitharaman had kept the GST at 28% but brought in other relief. She gave a 2% grant to auto component manufacturers, while customs duty was raised from 25% to 30%. In focus: Electric Vehicles In the last Budget, the government provided subsidies to boost electric vehicles. “To make electric vehicles affordable to consumers, our government will provide additional income tax deduction of ₹1.5 lakh on the interest paid on loans taken to purchase electric vehicles. This amounts to a benefit of around ₹2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicles,” Sitharaman had said during the budget in July. Indian auto manufacturers like Tata Motors, Maruti Suzuki, Mahindra &amp; Mahindra have a slew of EV launches in 2020, who are all hoping to reap them. However, in the last budget, the government gave relief to consumers who want to buy EVs. Experts hope that the upcoming budget will bring in measures which will boost EV infrastructure in the country. “The Government may not be willing to look at additional subsidies on EV-passenger vehicles but can help by further allocations to charging infrastructure (beyond current allocations) to look at decreasing the total cost of deploying EV charging stations and speed up adoption across the country,” said Raghunath. See Also: <a href="https://www.businessinsider.in/budget/news/education-budget-2020-the-rise-in-budget-allocation-for-education-is-just-not-enough/articleshow/73182288.cms?src=hp_bgt">The rise in budget allocation for education is just not enough</a> <a href="https://www.businessinsider.in/budget/news/health-budget-2020-after-963-children-died-in-one-hospital-in-the-last-year-indians-will-be-watching-the-centres-allocation-to-upgrade-public-healthcare/articleshow/73169619.cms?src=hp_bgt">Health Budget 2020: After 963 children died in one hospital in the last year, Indians will be watching the Centre’s allocation to upgrade public healthcare</a>

Budget 2020: Auto industry expectations range from GST cuts to another EV boost

<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

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.

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