Panaji: The all-powerful GST Council Friday may have brought in a lot of cheer for the corporates, but among the hopefuls – the automotive industry – has a good reason to be disappointed.
The only concession the FinMin has made for the automotive industry is the announcement that passenger vehicles of engine capacity 1,500 cc (diesel), 1,200 cc (petrol) and length not exceeding 4,000 mm designed for carrying up to 9 persons will attract compensation cess of 1 per cent for petrol and 3 per cent for diesel vehicle over and above the 28 per cent tax rate.
Council recommended same compensation cess rate for vehicles having these specifications (length and engine capacity) but designed for carrying more than 10 persons but up to 13 persons.
It’s no secret that for a while, the automotive industry has been raising red flags as the sales of vehicles hit an all-time low in the country. And this comes at a time when the expensive BSVI fuel transition is to be implemented soon.
Because of the confusion in the market, consumers are onto a holding pattern which has resulted in huge unsold BSIV inventories. The industry, through its representatives had prayed to the Finance Ministry and the GST Council to reduce the GST rates on cars from 28 per cent to 18 per cent. But to no avail.
Industry body Society of Indian Automobile Manufacturers (SIAM) Saturday said the auto industry would have to “find its own balance” to boost demand, with the GST Council declining to cut rates for the sector.