The SIAM has issued a statement on GST rates and has called for a standard rate on small cars. It has said that anything other than a small car should be charged at eight per cent qabove the standard rate. They have also called for the implementation of standard rates on MUVs, two wheelers, three wheelers and CVs.
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 stressed for the inclusion of road tax and registration tax to be brought under the ambit of the GST.
We could expect a 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. 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.
What is GST and how will it benefit the automotive sector
