New Delhi, Sep 4 Union Minister Prakash Javadekar on Friday assured the automobile industry that he will take up its demand for a cut in the Goods and Services Tax (GST) with the Union Finance Minister and the Prime Minister.
Speaking at the virtual Annual Convention of Society of Indian Automobile Manufacturers (SIAM), the Minister said that the industry will get some concessions to boost demand for vehicles, especially during the festive season.
Acknowledging the auto industry's demand for reduction in GST rates, he said: "GST reduction will ultimately benefit the government and I will take it up with Finance Minister Nirmala Sitharaman and the Prime Minister's Office."
He noted that any decision on the GST cut will require the GST Council to take into account the socio-economic impact of the decision.
Citing the ongoing issue of the GST compensation, which the Centre has been unable to pay to the states, Javadekar said that as central revenues are already very low, such decisions on the rate cut would have to be thoroughly looked into.
"I hope you will get some good news soon," said Javadekar, who holds the portfolios of Environment, Forest & Climate Change, Information & Broadcasting, and Heavy Industries and Public Enterprises.
As the pandemic has worsened the demand scenario in India's automobile sector, which was already going through a slowdown in the past year or so, industry players have been seeking support from the government through tax cuts to push up demand.
Recently, Sitharaman said that the GST Council will look into the proposal to lower the GST on two-wheelers, which neither come under luxury nor sin goods.
Javadekar also assured the industry that a well-entrenched vehicle scrappage policy will be out soon that bodes well for the automobile sector.
The policy is expected to encourage customers to go in for new purchases backed by government incentives in lieu of their old vehicles.
Significantly, the move is considered to be the most vital element of any further package to prop up the sector's growth.
The Minister said: "Infrastructure is the only answer to the growth story of India and the government is looking at investing Rs 100 lakh crore in infrastructure projects over the coming years. This will also hugely benefit the automobile industry."
"The government is also focusing on e-mobility by pushing for better infrastructure and providing incentive to electric vehicle manufacturers. Once the cost of electric vehicles goes down, the demand will increase and this segment will be highly profitable."
( With inputs from IANS )
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