Gadkari assures all possible Govt help to industry
The Government seems to be getting ready to consider the demand of the auto industry to reduce the GST to revive demand in the sector that has led to massive job losses and production cut. Auto sector invites 28 per cent GST.
Union Minister Nitin Gadkari on Thursday said he will discuss the demand for GST reduction with Finance Minister Nirmala Sitharaman and assured the crisis-hit automobile industry of all possible support from the Government.
“I will follow it up with the Finance Minister. The sector needs help right now to increase vehicle sales,” Gadkari said on the sidelines of an event attended by automobile industry stakeholders in Delhi.
Gadkari said with the impending increase of vehicles’ prices and the upcoming BS VI norms deadline, the industry’s suggestions for reduction in tax on petrol and diesel vehicles are appreciable.
The next GST Council meeting to be chaired by the Finance Minister is scheduled for September 20 and on agenda are deliberations on automobiles, tyres, cement, ACs, and large LCD televisions.
Automobiles also bear a cess, depending on the size of the vehicle, further increasing the total tax incidence.
While announcing that if GST is reduced for some time to help the industry, Gadkari asked automobile companies to have in-house finance companies to help generate sales.
Speaking at the event earlier organised by Society of Indian Automobile Manufacturers, SIAM president Rajan Wadhera had asked the Government to consider reducing GST on automobiles to help it overcome the prolonged slowdown.
“We have reduced GST in electric vehicles. Now I am trying that GST on hybrid vehicles is also reduced. I am following up regarding this with the Finance Minister,” Gadkari said.
Gadkari, who had in 2017 stated the auto industry would be “bulldozed” if they didn’t push for electric vehicles, also struck a reconciliatory note saying that the Government has no intention to ban petrol and diesel vehicles.
The Union Minister also dispelled fears that the Government is planning to ban petrol and diesel vehicles. “I want to make it clear that the Government has no such plan. We are not going to do anything like that,” said Gadkari.
He also said he would take up a discussion with the Finance Minister for extending possible export incentives on automobile makers, as has been done for the sugar industry.
CII President - Designate, MD and CEO of Kotak Mahindra Bank, Uday Kotak also urged automobile manufacturers to give emphasis on exports in order to create additional avenue to overcome the slowdown in the domestic market while stressing that a weaker rupee will make it even more favourable.
SIAM also drew Gadkari’s attention for Government to consider a single nodal regulatory Ministry for the auto industry, which currently comes under several Ministers regarding various functions.
With the implementation of BS-VI norms from April next year, Wadhera said Indian auto industry will be at par with the best in the world when it comes to pollution; and therefore restrictions on different vehicles based on fuels must be removed. He also asked the Government to support the industry whenever courts decide otherwise.
Wadhera said due to the current downturn, 15,000 contractual jobs have been lost in the automobile manufacturing and around 2.8 lakh in dealerships, while components manufacturers are staring at 1 million job losses if the downturn continues.
While Maruti Suzuki India CEO and Managing Director Kenichi Ayukawa, meanwhile, welcomed Gadkari’s assurances to help the auto industry and said the industry was eagerly looking forward to concrete steps, Tata Motors CEO and Managing Director Guenter Butschek said the Indian automobile industry growth story is about to collapse due to ongoing slump triggered by a variety of factors, including low consumer sentiment and non-availability of liquidity.