SIAM issues statement on GST rates
The SIAM has issued a statement on GST rates ahead of possible implementation in the next year or so. The landmark tax reform Bill was passed 1.5 months ago after unanimous approval and many years of struggle.
This bill will greatly benefit the auto industry as a whole as it will help reduce the tax burden on consumers significantly. Ahead of the scheduled date for official implementation, the SIAM has said that there should be only two rates for conventional vehicles. The first is that a standard rate should apply on small cars, MUVs, two wheelers, three wheelers and commercial vehicles while eight per cent more than standard should be charged on anything other than a small car.
They have also said that a GST rate of less than eight per cent below the standard should be levied on electric vehicles, hybrid electric vehicles and other alternative fuel vehicles. They have also mooted for the inclusion of road tax and registration tax to be brought under the ambit of the GST.
The initial statement is a bit ambiguous as it is still unclear if the current vehicle definitions will be retained once GST is implemented. It is also good that they have properly included electric and hybrid vehicles in their statement as this is the way forward and has the potential to further transform and boost manufacturing in the sub-continent.
