The Indian automobile industry’s struggles since 2019 have been for everyone to see. And with the coronavirus pandemic wreaking further havoc, the industry has continually demanded relief measures, including a reduction in GST rates. A PTI report notes that Tata Motors recently reiterated that demand, saying that the Indian government’s support in the context of GST rate reduction will be a big help for the passenger vehicle segment. A reduction in the exorbitant GST rates levied on passenger vehicles, it continued, would help offset the increase in vehicle prices brought on by the transition to BS6 emission norms.
Shailesh Chandra, President Passenger Vehicles Business Unit, Tata Motors, said, “Due to this transition from BS IV to BS VI, there has been a significant escalation in cost. In these trying times customers are not very confident about the outlook how the future is going to be including their salaries and jobs. On top of that there has been an increase in vehicle prices. It definitely impacts the industry immensely and any support by the government to reduce GST to offset some of the price increase will definitely boost the whole PV industry.”
Automobiles in India currently attract a GST rate of 28 percent along with an additional cess ranging between 1 percent to 22 percent. Chandra explained that the reduced GST will be a huge relief for car buyers who may not be feeling too keen about buying a vehicle because of the precarious outlook for the economy as well as that of their income. Hence, the reduction in GST rates on cars will boost volumes for the passenger vehicle industry.
Once again, we remind you that the demand for reduction in GST rates for vehicles is not new. FADA, SIAM, and countless other industry players have repeatedly urged the Indian government to consider a reduction in GST rates. Clearly, it is yet to work.