Society of Indian Automobile Manufacturers (SIAM) has demanded only two Goods and Services Tax (GST) rates for the passenger vehicles in the budget of 2018.
SIAM is the apex industry body of leading vehicle and vehicular engine manufacturers in India
In a proposition made by SIAM for the budget of upcoming years, the members said, "The automotive industry has been suggesting two rates for cars in place of multiple tax rates, and requests the government to keep only two rates for vehicles under the GST regime."
According to PTI, adding to the proposal was a suggestion of imposing a special tax rate of 12 percent on vehicles powered by electric and hydrogen fuel cell.
As per the present GST rule, multiple rates are being charged depending on the type of passenger vehicles.
While small petrol cars of engine capacity less than 1200cc are charged with a cess of 1 percent, diesel cars of the engine capacity of less than 1500cc are levied a cess of 3 percent, on the base rate of 28 percent.
For hybrid cars and SUVs of mid and large range, the GST rate is 15 percent. The vehicles with the maximum capacity of 13 passengers are charged 15 percent cess.
The automobile body has even recommended the government to charge a GST of 5 percent on the differential value between sale and purchase price of the used cars, PTI further reports.
The body has also put forth a proposal to the ministry of finance to exempt the 10-13 seater ambulance from compensation cess.
An extension of custom duty concessions, too, has been sought by the industry body for the additional critical components.
PTI report also says that the body has asked for custom duty concessions to CBUs (completely built units) to be renounced, for the electric vehicles to support 'Make in India' programme.
The auto industry has voiced its concerns of the inability of manufacturers to file claims since July and that the amount has aggregated to over a sum of Rs. 1,000 crores.
According to the industry experts, the current GST system is being problematic when it comes to making upfront payments and claiming the input tax credit. As per a report of the Economic Times, the working capital requirements have increased for the companies and exports are being reconsidered until the issues are resolved.
Information source: ibtimes
Title image source: hondanews