Tax rates on automobiles in the upcoming GST and monsoon will be crucial factors which will influence the rate of growth of the industry in the new fiscal, according to Toyota Kirloskar Motor. Rising commodity prices are beginning to put pressure and it will take a review of the situation to consider pricing changes after April, company said.
“The key factors for auto industry in the new fiscal is at what rates vehicles will be taxed under the GST and how monsoon will be this year,” Toyota Kirloskar Motor Director and Senior Vice-President, Sales and Marketing, N Raja told PTI. He was responding to a query on what could be the major challenges faced by the auto industry faced a lot of speed breakers in last fiscal. Elaborating, Raja said: “If the automobiles are taxed similarly under GST as it is today, it will not make much of a difference.”
However, if they are taxed more, prices will have to go up and it will definitely have an impact on demand, he added. The GST Council has already decided on a four-tier rate structure of 5, 12, 18 and 28 per cent and a cess on the peak rate for demerit and luxury goods. The lok Sabha has also approved 4 supplementary legislations-CGST, IGST, Union Territory GST and Compensation law. On monsoon, Raja said already reports of below normal monsoon have started to come, while the country is witnessing a heat wave. “If the monsoon is not normal, it will have an impact on rural demand and even urban demand could also be affected,” he said.