The Society of Indian Automobile Manufacturers (SIAM) has lauded the passage of the GST Bill in the Parliament. The landmark tax reform has got unanimous approval after much deliberation and many years of struggle.
Commenting on the development, Vinod K Dasari, President, SIAM, said “It is a historic amendment in the tax regime and will be a great benefit for the manufacturing sector. The automotive sector is one of the fastest growing manufacturing industry in the country, however, it has seen sluggish growth in the past few years and the taxation process is one of the factors. The implementation of GST will provide a necessary impetus to this sector and we are confident that with simple and clear tax structure compliance would be easier and hence there would be reduction in litigation. It will be a major step towards ease of doing business initiative of the Government.”
The Indian auto industry will be one of those who will greatly benefit from the passage of this Bill as it will change the way vehicles are priced across the country. The auto industry has four different slabs of excise duty based on dimensions and engine capacity ranging from 12.5 per cent for small cars, CVs, 2/3 wheelers to 30 per cent for luxury cars and SUVs. In addition the Centre recently announced imposition of an infrastructure cess ranging from 1 per cent to 4 per cent. Under the GST regime, these rates are expected to be converted to a maximum of two rates thereby making the tax structure on automotive industry more simple and structured.
