Home » Business & Economy » SIAM's Wishlist on GST rates on Cars
 

SIAM's Wishlist on GST rates on Cars

Sachin Sharma | Updated on: 21 December 2017, 18:00 IST
GST rates on Cars

The SIAM (Society of Indian Automobile Manufacturers) has proposed radical changes in the GST (Goods and Services Tax) applied to automobiles by the Indian government. The apex industry body has put-forward its expectations from the government that these alterations should be made in the GST during the upcoming Union Budget 2018-19.

At present, the base GST regime for automobiles ranges from 12% to 28%. In addition to this, a cess of 0 to 22% is levied on different varieties of cars. As a part of government's plan to promote electric vehicles in India, the GST rate is kept lowest for this segment of cars at 12%. The small petrol and diesel cars attract a net tax rate of 29% to 31%, respectively. The GST rates (including the cess) on hybrid, mid-sized and luxury cars is 43%, 45%, and 48% respectively. The category that attracts the highest tax rate of 50% is SUVs (Sports Utility Vehicles).

In place of multiple tax rates, the industry body has proposed that there should be only 2 GST rate brackets for automobiles. The proposal includes a special rate of 12% for hydrogen fuel cell powered cars, the same bracket where electric vehicles are placed. The body has also asked for a concession on customs duty on additional critical components of electric vehicles. At the same time, a denial of concession on CBU (Completely Built Units) of electric vehicles is proposed, so that their manufacturing in the Indian market can be promoted. The apex automobile industry body has also sought government's help in clearly defining CKDs (completely knocked down) units and SKDs (semi knocked down) units for electric vehicles.

The other proposal on GST rate change includes a GST rate of 5% on the difference value of sale and purchase price and exceptions from compensation cess for 10 to 13-seater ambulances. However, it remains to be seen which of these items from the SIAM wishlist on GST rates would be accepted by Finance Minister Arun Jaitley in the next Budget.

First published: 21 December 2017, 18:00 IST
 
PREVIOUS STORY
NEXT STORY