The Budget is out and surprisingly there isn’t much in it for the automobile industry as such. There are quite a few sops for the MSMEs but the big players would be rather disappointed. While the tax sops for the salaried class will help boost sales, prima facie it doesn’t seem to have much for the car makers. The excise structure will continue to be the same but the good news is, it will be replaced by the GST this financial year.
The GST bill is expected to be implemented around September 2017, midway through the financial year 2017-18. Historically, cars have always been listed in the luxury category attracting the higher slabs for taxation and the situation might continue under the GST regime as well. It needs to be seen if the current breed of small cars – the sub four-metre, less than 1.2-litre petrol and less than 1.5-litre diesel engine cars – will attract the lower 12 per cent bracket or the 18 per cent bracket.
Finance Minister, Arun Jaitley, seemed upbeat about the progress of the GST bill and the positive participation by the states in drafting and finalising the law. The bill has been passed in both the houses and nine conclaves have been conducted till date to work on the finer details of tax slabs, revenue sharing and implementation roadmap.
