Union Heavy Industries Minister Anant Geete has said that Finance Minister Arun Jaitley is seriously considering the demand of automobile manufacturers, who raised concerns over hike in Goods and Services Tax (GST) cess on luxury vehicles, following the Union Cabinet approval of the promulgation of an Ordinance that would allow the GST Council to hike the maximum rate of compensation cess on large and luxury vehicles to 25% from the current cap of 15%.
Luxury vehicle manufacturers will be hit hard with the move to hike cess on large cars and sports utility vehicles (SUVs) to 25%, saying it was against the spirit of liberal market dynamics and would affect future plans of expansion under Make in India initiative. Geete said that industry has given its memorandum and the ministry has forwarded that to the finance minister, who he is seriously considering that.
The Minister also said that the ministry has given six months extension to FAME India (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India) Scheme as the government is promoting hybrid and electric cars. The main cost of electric car is lithium battery, so they are trying to see how they can cut the battery price. He added that the government is committed to supporting the sector in all possible way and added that the sector is moving from BS-IV to BS-VI emission norms.
