Auto sector hopeful of GST rate cut to 18%

Await FM’s word post GST council meet

The automotive sector is hopeful of a reduction in the Goods & Services Tax (GST) rate from 28% to 18%, which it believes, could help revive the industry and create demand.

Welcoming Finance Minister Nirmala Sitharaman’s decisions in Friday’s announcement, Rajan Wadhera, president, Society of Indian Automobile Manufacturers said there was a need to lower the vehicle transaction cost. “We will await the next announcement of the Finance Minister on GST reduction, post the GST Council meeting,” he said.

Vikram Kasbekar, executive director, Operations (Plants) and CTO, Hero MotoCorp, said, “We reiterate our request that two-wheelers, which are neither luxury nor ‘sin’ goods, require a reduction in the GST rate from 28% to 18%. This will help boost demand immediately leading to an even more positive impact. We hope this will be addressed in the next round of measures,” he said.

Ashwin Patil, senior research analyst (auto sector) at LKP Securities, said any decision on the GST rate revision would be taken on Sunday, when the Minister meets the GST Council.

“This, if in favour of the industry, will be a major boost to the sector, as the industry is vouching for a GST rate cut from 28% to 18%,” he said. He said the Finance Minister had indicated she would meet the press twice more over the coming weeks to address more issues, thus spurring hopes in the auto sector, especially on scrappage policy and GST rate cut.

Auto component makers have also demanded reduction of GST rate to a uniform rate of 18%, while a section of luxury carmakers has asked the government to withdraw the super luxury tax.

Rahil Ansari, Head — Audi India said, “We have always maintained that luxury is not a sin and are thus enthused by government’s focus on reviewing the Super Rich tax. This should improve customer sentiment specifically in theindustry.”

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Printable version | Jun 1, 2020 11:30:17 AM |

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