Minister of State (MoS) for Finance Anurag Thakur Friday asked automobile sector players to take up their demand for reduction in GST rate on cars with state finance ministers as well, who are part of the GST Council that takes a decision on such rate reductions. He assured the sector of all possible support from the central government. The Centre has already indicated that it will take up the proposal of Goods and Services Tax (GST) rate cut on automobiles to the GST Council, which is meeting later this month in Goa.
Automobile and component manufacturers are seeking GST cut on automobiles to 18 per cent from 28 per cent to help the sector come out of a prolonged slump that has resulted in job losses.
“You are aware that any rate cut on GST needs to be approved first by the fitment committee, then by the GST Council. I request all of you to also reach out to the state finance ministers who are part of the GST Council,” Thakur said, speaking here at the annual convention of the Automotive Component Manufacturers Association (ACMA).
He said the Finance Ministry has received multiple representations from car manufacturers, dealers and many of the stakeholders regarding the GST rate cut.
“Various OEMs (original equipment manufacturers) are based out of various parts of the country. The issue is whether they (the manufacturers) are taking these issues with their finance ministers or not,” Thakur said, as per a PTI report.
He said state finance ministers should be equally aware of the challenges faced by the OEMs or the automobile manufacturers.
“Our humble request is to apprise them also so that whenever this issue is discussed in the GST Council meeting, everyone should have their view point,” he added.
Finance Minister Nirmala Sitharaman has already suggested in the last meeting that the Centre was open to take it to the GST Council for deliberation, and most of the decisions were unanimous in the previous GST Council meeting, Thakur said.
With sales of automobile products across segments in the slow lane for the past 10 straight months now, almost all manufacturers of passenger vehicles and two-wheelers have been resorting to production cuts in the past six-seven months to clear unsold inventory. Thakur said the government will consider various measures including the scrappage policy to push growth in the sector.
Automotive industry body Society of Indian Automobile Manufacturers (SIAM) on Friday sought government intervention to help the sector in smooth transition to BS-VI emission norms from April next year.
Speaking at the ACMA convention, SIAM president Rajan Wadhera said vehicle manufacturers and component suppliers were on track to meet stricter emission norms, but expressed concern over availability of BS-VI fuel across the country. “The transition is very abrupt on March 31, both manufacturing and sales (of BS-IV vehicles) stop. This has never ever happened anywhere in the world,” Wadhera said.