Auto industry demands two rates under GST

By | October 8, 2016

Auto industry demands two rates under GST

With the government looking at rolling out GST from the next financial year, Society of Indian Automobile Manufacturers (SIAM) on Thursday said there should be only two rates for passenger vehicles instead of the four at present. The industry body said standard rates must apply on small cars, two-wheelers, three-wheelers and commercial vehicles, while bigger cars should attract 8 per cent more than the standard rate. “There should be only two rates for conventional vehicles,” a statement from SIAM said. “While for a long time there were only two rates of excise duties on passenger cars, in recent years, the bigger car rates have fragmented and today we have four rates for passenger cars excluding electric vehicles and hybrid electric for which lower rates are applicable,” the statement said. It also pitched for a lower GST rate for electric vehicles, hybrid electric vehicles and other alternative fuel vehicles, which should be at least 8 per cent less than the standard rate. “In view of the current scenario, there is a need to look at GST rate for automobiles sensitively,” SIAM said.

SIAM said its “members have committed to building the nation responsibly and as such no automotive product should be clubbed with goods that are health hazard, like cigarettes, pan masala, liquor, etc.”

It added that the automobile industry hads been looking forward to the GST as for manufacturing the industry accumulates a lot of embedded taxes and duties which make manufacturing in the country less competitive.

Further, it pointed out that its members have made large huge investments in locations falling under Area-Based Exemption scheme in places such as like Uttarakhand and Himachal Pradesh. “The period of the scheme is still not over and as such there is a need to protect the benefits to those units under GST regime till the end of the scheme,” it said.

In addition, the industry body said, the road tax and registration tax still remain outside the GST framework. This will further burden the consumer and Road T axes needs to be subsumed in GST.

The industry body said it hads given a detailed feedback for the consideration of the government. “Some of the transition issues may have serious short-term implications for the economy, if not addressed now, though in the longer run the GST framework currently contemplated will be best for the economy,” it said. Source – [07-10-2016]

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