Auto Industry Bats For Smooth GST Transition
Definition of luxury cars, potential roadblocks in transitioning to GST keeps auto industry on the edge.
Carmakers in India hope that there won’t be a massive change in the current tax structure once the Goods and Services Tax (GST) is implemented.
Clarity on the definition of luxury cars – which will attract an additional cess over and above the proposed 28 percent tax rate under the proposed GST structure – and a smooth transition to the new tax structure are two issues which found mention in the auto industry’s pre-Budget wishlist.
“It appears to us that the definition (of small and luxury cars) will remain the same, and the tax incidence will be similar to what it is today. There may be some differential – 2-3 percent up or down – but it will not be a major change,” Pawan Goenka, executive director and group president (auto and farm sector) at Mahindra & Mahindra said after a pre-Budget meeting with the government on Monday.
Kenichi Ayukawa, managing director and chief executive officer of Maruti Suzuki India, who was also present at the meeting, hoped that the definition of small cars under the GST remains the same.