Budget 2018 for drivers, motorists, cabs and how it will affect your pocket

Budget 2018: The Automotive Industry might see some big changes to way cars and small cars are taxed with some simplifications expected on the GST and Cess charge front, additionally the Budget 2018 might see some incentives being bolstered on R&D costs to promote the governments "Make in India' Policy

Written by Ronak Shah

Updated: January 31, 2018 15:40 IST

Budget 2018 for drivers, motorists, cabs and how it will affect your pocket

On 1st February 2018, Finance Minister, Arun Jaitley is expected to announce an array of funds allocation across various sector for the upcoming financial year and might also announce many changes related to Income Tax, Corporate tax and incentives in various departments including in electric vehicles in the automobile sector.During FY 2018-19, be ready to spend more on cabs as taxes on diesel-powered cars might go up which might force cab aggregators like Ola and Uber to start charging more from its customers to keep its driver partners happy. Auto sector has its own wish list from FM and Government and is hopeful that on larger scheme of things it expects incentives on R&D and reduction in import duties for some of electric vehicles components.

Budget 2018: Expectations for vehicle buyers and how it could affect car prices

On the two-wheeler front, two-wheeler manufacturers do not expect any major announcements in the budget 2018 speech. With the implementation of Goods and Service tax (GST) many of the indirect taxes have been removed and overall the industry is happy with the shift to GST. However, there are some huge expectations on electric two-wheelers and electric scooters incentives and many two-wheeler makers want a clearer road map on this front.

Owning a new car might just get expensive as government’s focus on alternative source of fuel takes a strong stance. Nitin Gadkari has already warned the auto-industry and has threatened to bulldoze automakers who do not make this shift. At the 25th meeting of GST Council in Guwahati, Finance Minister Arun Jaitley led GST council did revise the rates on various products, including old and used cars. The GST rates were slashed and cess was also taken off across several categories.

Jatin Ahuja, Founder and Managing Director, Big Boy Toyz had said “We welcome this move by the government which revised the new tax regime for Used motor vehicles. The tax rate which now stands at 18% will benefit the industry and boost consumer confidence at large.”

The GST rates on new and used cars will be effective from January 25 across India. Automakers and SIAM has suggested Government to exempt 10-13 seater ambulances from levy of compensation cess. Currently, ambulances are place at a tax bracket of 28% GST and an additional cess of 15%.

Sumit Sawhney, Country CEO and Managing Director, Renault India said that “with significant changes in emission and safety regulations, it is imperative for the industry to enhance their R&D expenditure. In addition, the Govt is planning full electrification of existing vehicles. R&D spends on new cars, EV designs for cars, bio-fuels like ethanol and electric powertrain will increase. It is therefore imperative that the earlier weighted deduction of 200 per cent on R&D expenditure, that was brought down to 150%, is restored.

This article was first uploaded on January thirty-one, twenty eighteen, at thirty-seven minutes past three in the afternoon.