With the Union Budget 2019 set to be presented in July this year, the Society of Indian Automobile Manufacturers (SIAM) has expressed its expectations from the same. The Indian automotive industry is currently witnessing a sluggish tenure. And to curb the same, SIAM wishes that the Union Budget 2019 will reduce the GST slab on all vehicles from 28 per cent to 18 per cent. In addition to this, the independent body also expressed that there should be incentives on the vehicle scrappage as it is going to help get rid of old and polluting vehicles of the roads.
In a pre-budget meeting with the finance ministry officials which was held earlier this month, SIAM suggested that the GST rate across vehicle categories should be brought down from the current 28 per cent to 18 per cent. This is going to help in bringing down the vehicle costs resulting in an increase in demand which has been at a lo since the past 11 months. To put things in perspective, during the month of April this year, passenger vehicle sales in India witnessed the most drastic decline in the last 8 years. The sales dropped by 17.07 per cent, the biggest decline since October 2011. Major reasons for the same were weak customer sentiment led by liquidity crunch, uncertainty before elections and high product prices.
In addition to suggesting a reducing in GST on vehicles, SIAM also suggested to the finance ministry officials that there should be an incentive-based vehicle scrappage policy. This is going to help the reduction of old vehicles which add to India’s pollution woes. Furthermore, in order to provide a boost to local manufacturing, SIAM also asked for an increase in the applied customs duty on imported commercial vehicles to be increased from 40 per cent to 25 per cent. The suggestion also included the reduction of customs duty on semi-knocked down commercial vehicles from 25 per cent to 20 per cent. SIAM also pitched that the customs duty on completely knocked down units of all vehicle categories should be reduced from 15 per cent to 10 per cent, hence, bringing it to the same state as it was.
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