Government can reduce GST in cars: Sitharaman
CHENNAI: Minister of Finance Nirmala Sitharaman on Sunday he said the government can cut GST cars in the short term. Currently, cars have less than 28 percent of GST slab.
The automobile sector was in a transition phase to produce engines and components meeting BS-VI fuel norms (from the earlier BS-IV), which comes into effect from April 1, 2020, Sitharaman said while responding to reporters here.
The minister said it was not the decision of the Union government, but a Supreme Court order two years ago that car companies should not produce any BS-IV vehicles after March 31, 2020, whether they are scooters or any other vehicle.
To a question about the automotive industry looking for a Goods and services tax rate cut, said it should be decided by the GST Council. The finance minister also said the government recommended the GST council to reduce car rates.
“The government has been in consultation with a lot of sectors and we are listening to their inputs,” Sitharaman said.
Several steps have already been taken including steps to enhance liquidity and lending in the market to boost the demand in the automotive sector, Sitharaman said. Regarding job losses, she said that most of the employment in the economic sector is generated by the informal sector which remains undocumented.
On confusion on electric vehicles and internal combustion engines, Sitharaman said, “We want all the vehicles to have due market share. We are not pushing one at the cost of others. ”
On August 23, the government announced a series of measures to increase demand in the automotive sector, including the depreciation cost of cars purchased until March 31, 2020 by companies, will increase to 30% from 15% in Currently, giving a tax incentive to the purchase of vehicles.
The ban on government departments buying new vehicles to replace their existing vehicle fleet was lifted to encourage the purchase of vehicles by government departments in an attempt to boost demand. The government is also considering scrapping policy.
The increase in the single vehicle registration fee will be deferred until June 2020.
Recent measures are expected to boost the sector's recovery from the current slowdown. However, FM did not refute or admit the current situation as the economic slowdown.
On the confusion in electric vehicles and internal combustion engines, he emphasized: “We want all vehicles to have the market share due. We are not pressing one at the expense of others.
(With PTI tickets)