In order to compensate auto industry, which is expected to see price hike in range of 10-15% with the coming of new emission and safety regulations, Society of Indian Automobile Manufacturers (SIAM) has urged the government to cut Goods and Services Tax (GST) on passenger vehicles and two-wheelers from 28% to 18%. It fears that with the increase in prices, the demand for their products will be impacted. Presently, automobiles attract peak GST rate of 28% with additional cess ranging from 1% to 15%, depending on the length, engine size and type.
SIAM’s President Rajan Wadhera said ‘we want the government to be sensitive to the fact that BS-VI emission introduction (from Apri1, 2020) and other safety regulations will add to the cost. If it adds to the cost it is likely to lead to a slowdown in the demand’. HE further added if the demand goes down, government collection of taxes will also go down. 'Therefore, for a win-win situation, we are seeking a 18 percent GST in automobiles’.
He further said that a price hike of even 10% would impact the sales of the two-wheeler segment, which currently witnesses offtake of over 22 million units annually. In PVs also, the prices are going to go up in the range of 10-15% on account of technology and safety enhancements. There also we need serious considerations by the government so that it is a win-win situation for all.
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