Auto Industry demands GST cut and incentive-based policy to increase demand.
Society of Indian Automobile Manufacturers President Mr Rajan Wadhera, while welcoming the focus towards MSMEs, NBFCs and the Agri-sector in Aatma Nirbhar Bharat package, said the Indian Automotive industry needed an immediate stimulus to boost demand, which has not happened. Mr Wadhera said that “Industry was keenly looking forward to some direct fiscal measures which could have boosted demand for the Auto sector and stop job losses. SIAM has had several engagements with Government of India at various levels, where specific suggestions were made for demand stimulus including reduction in base GST rates from 28% to 18% for a limited period and an incentive based vehicle scrappage policy, which would have made it a less painful revival and kickstarted the industry.”
Mr Wadhera added “There is also an urgent need to support the dealers in terms of improving their liquidity and including them under MSME Act by changing its definition. The Industry would continue to engage with the Government and seek direct interventions for revival.”
Indian Automotive Industry supports employment of more than 3.7 crore people and contributes to 15% of GST amounting to INR 150,000 crore every year. The sector was already facing an unprecedented challenge with 18% degrowth last year. As per an assessment made by SIAM on the impact of COVID-19 on demand for vehicles in the current financial year, the Indian Automobile sector could have a de-growth in the range of 22 to 35 % in various industry segments, for the year FY21, if the overall Indian GDP growth is at 0-1% for FY 21.
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