GST

SIAM urges for GST cut on automobiles

An industry executive believes that there will be a reduction in vehicle prices if the GST rate is brought down. Also, a rate cut will help in stimulating the demand for vehicles, which has been rather slow for the past 11 months.

In April, passenger vehicles sales massively dropped by 17.07%. In nearly eight years, this has been the steepest decline the auto industry has experienced since October 2011. Uncertainty prior to elections, high product rates, and liquidity crunch amongst customers hit automobile sales to a large extent.

Also Read: GST collection exceeds Rs 1 trillion this May

Additionally, SIAM has asked the government to increase the applied customs duty on fully imported commercial vehicles (CV) to 40% (currently it is 25%). SIAM aims to assist the local manufacturing units by increasing the custom duty charges. SIAM mentioned in its recommendation that the custom duty charges on semi-knocked down CVs must be brought down to 20% (currently it is 25%). This GST rate cut will help in promoting local value addition.

SIAM also pitched to bring down the custom duty charges on completely knocked down units (CKDs) of all forms of vehicles to 10% which was the earlier rate that was applicable. Currently, the customs duty on CKDs is 15%.

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