SIAM Seeks GST Rate Cut, Incentive-Based Vehicle Scrappage Policy To Revive Auto Sector
The revival of the auto sector is critical for manufacturing in India and the economy, SIAM President Rajan Wadhera says.
Society of Indian Automobile Manufacturers has sought a temporary GST rate cut and introduction of incentive-based vehicle scrappage policy to revive the auto sector battered by a prolonged slowdown and now the coronavirus pandemic.
While appreciating Reserve Bank of India’s measures to support NBFCs and MSMEs by infusing liquidity in the system, SIAM sought several "key interventions" for the auto sector.
"Covid-19 has left the Indian economy and automobile industry in deep distress and financial support and demand revival is a necessity," SIAM President Rajan Wadhera told Press Trust of India.
The pandemic is an unprecedented situation and hence requires unique measures, he said. "SIAM is hopeful that lending rates would be slashed substantially for consumers to benefit in these challenging times.”
In order to revive the auto industry, SIAM has sought a temporary cut in standard GST rate by 10 percent across all vehicle categories and auto components, while maintaining the current product segment GST rate differential, Wadhera said.
The industry body has also sought introduction of incentive-based vehicle scrappage policy to generate demand. "The incentives can be in the form of 50 percent rebate in GST, road tax and registration charges," he added.
SIAM has also asked for fund allocation for diesel and CNG bus procurement by state transport undertakings, over and above the allocation for electric buses under FAME-II scheme, Wadhera said.
Besides, it has also asked to expedite release of all pending payments to vehicle manufacturers and contractors of highway and infrastructure projects against past procurement by central government and other agencies to increase liquidity in the system, he added.
Wadhers said SIAM has also sought faster disbursement of all government incentives and benefits to all industries. "The auto industry is the backbone of the manufacturing sector in India, in terms of employment and contribution to GDP. Its revival will be critical for the manufacturing sector and the Indian economy," he added.