According to a recent report by TOI, Nirmala Sitharaman, the finance minister of India indicated that the government may cut the GST imposed on the cars and bikes. Presently, the automobiles are under the 28% GST slab while the final decision on reducing the GST would be taken by the GST council soon.
Since the Supreme Court’s decision to implement the new emission norms in India will be valid from April 1, 2020, the government of India plans on hearing all the difficulties being faced by major sectors in India and offer alternate solutions.
Talking to the reporters on the possible GST reduction, Sitharaman stated – “The automobile sector was in a transition phase to produce engines and components meeting BS-VI fuel norms (from the earlier BS-IV), which comes into effect from April 1, 2020.”
The reports suggest that the Indian government has requested the GST council to give a thought on reducing the GST applicable on cars and motorcycles. To boost the declining sales in the automotive sector, the government is also focusing on enhancing liquidity and lending in the market.
When asked about the increasing unemployment in the automotive sector, she reported that the major employers in the economic sector have been witnessed in the informal sector for which there is no proper documentation.
Commenting on the ongoing confusion between electric vehicles and internal combustion engine, Sitharaman stated “We want all the vehicles to have due market share. We are not pushing one at the cost of others.”
According to the reports, the government plans on offering tax relaxation to revive the automotive sales while at the same time, undertake other necessary actions regarding the downfall in the industry.
Major automotive brands will be introducing new products near the festive season to give a boost to sales. To gather customer attention, some of the car brands have already listed various discount offers on their portfolio for the festive season.
The recent government policy has commanded the depreciation cost of automobiles purchased till March 31, 2020, to be increased to 30% from 15%. The government has opposed to increasing the one-time registration fee till June 2020 while new scrappage policies have also been implemented.
