SIAM cuts GST rate for auto sector, demand for scrap policy for older vehicles

An association of domestic vehicle manufacturers has asked the government to temporarily cut the rate of Goods and Services Tax (GST) on vehicles to improve the condition of the vehicle sector amid the Coronavirus crisis. At the same time, SIAM also asked for the implementation of the policy of scrapping old vehicles in junk by encouraging people as soon as possible. Society of Indian Automobile Manufacturers (SIAM) spoke of taking steps to help the automobile sector as well.

This statement from his side came amid relief from the non-banking financial companies (NBFCs) and small and medium enterprises by taking measures to infuse cash into the Reserve Bank’s system. “The Coronavirus crisis has put tremendous pressure on the Indian economy and the auto industry,” SIAM President Rajan Vadhera told PTI. In such a situation it is necessary to take measures to improve the demand and financial support for the sector.

“Vadhera hoped that the interest rates of auto loans will come down so that customers can benefit.” The government should temporarily reduce the GST rate. He should make it 10 percent for all categories of vehicles, auto parts, etc. At present different rates of GST are levied on different types of vehicles. Apart from this, SIAM has demanded a vehicle junk policy to encourage people. This incentive can be given to them as exemption from GST, octroi or registration fee.

Vadhera also asked the government to release funds for the purchase of diesel and CNG buses to the states. This should be different from the FEM-2 scheme which is applicable for electric buses.