Carmakers Request to Spare Auto Industry From Taxes for Sometime
By Editor News ( Feb 01, 2021 )The first few appeals involve specific request regarding the automobile industry stating that there shouldn’t be any levying of new taxes. This is considering the criticality and stats of low sales volumes as a result of pandemic and pre-pandemic market slowdown and fall.
Several requests have been submitted by the automobile industry to the government, though the union budget is just a couple of days to go. A part of them is for the entire industry while few serves the purpose for a specific part of the automotive industry. Considering the economy as an entity industry expectation on higher expenditure on infrastructure by the government since the economy has been struck hard as a result of pandemic lockdown. These will result in boosting the economy considerably.
The investment in the automotive industry in the union budget would result in a better boost up of the foundation for good growth in the next couple of years. Hence, the government considering the industrial concern is critical else there can be a skip or miss over the prospectus which may affect the market even more. The first few appeals involve specific request regarding the automobile industry stating that there shouldn’t be any levying of new taxes. This is considering the criticality and stats of low sales volumes as a result of pandemic and pre-pandemic market slowdown and fall. The one positive prospectus seen developing in the last couple of months is awareness of e-mobility and effective growth of e-mobile / green automobile in the Indian market, that subject to provide opportunities and interest to both manufacturers and customers.
EVs market size in India is still at its initial stage and which needs to be boosted up even more. There has been immense support from government by incentivizing road tax for green number plated and this has been a very outcasted and supportive move.
Likewise, cuts in import duties have been suggested, which has a strong potential to accelerate the adoption of EVs, which in turn will drive luxury motor companies to work in the field to improvise on EVs locally in the country. Also, the issue has been escalated for the charge points for EVs which standing still as a major bump in EVs pathway overtaking the Indian market.
High tax imposing over the luxury segment of electric automobile is another challenge and has been slowing down the growth. The industry doesn’t expect the government to loosen up on GSTs but on a reduction in compensation cess, stacked up to 22 per cent in case of luxury or premier class segment of the automobile, should be phased out. The cess added to GSTs leads to 50 per cent of the effective cost. These taxes make the automobile out of reach for a variety of sections in the society and hence the market of luxury and premium class vehicle is way too affected.
It is anticipated that the policymakers will consider the effective importance of automobile to boost the economy in India after the pandemic and will bring up changes for the collective good.