Government may increase duty on imported cars. Piyush Goyal advised to reduce royalty payment
- Reduction in royalty will help companies reduce vehicle prices and increase domestic sales
- Goyal said that a country like Australia has imposed certain types of import duties.
Piyush Goyal has asked auto companies operating in India to reduce royalty payments to their parent companies. He says that this will help the auto industry going through a crisis. He said that the vehicle companies have a good hold on the country’s vehicle market and they pay royalties of millions of dollars to their parent companies. Reduction in royalty can reduce their cash flow problem. This will help in reducing the prices of vehicles and increase domestic sales.
The government can increase duty on imported cars
Goyal said India’s vehicle exports were suffering due to tariffs and non-trade barriers of some other countries. He gave the example that a country like Australia has imposed different types of import duties. At the same time, Indonesia has fixed the import quota. He said, we are engaged in resolving these issues. We have better communication with Australia. I have also raised the issue with Indonesia. Industry should have fair access to the market.
GST rate may be reduced
The central government can give a big relief to the Indian auto industry, which is facing heavy pressure and lethargy due to the lockdown. The government is considering a 10 per cent reduction in the GST rate on all types of vehicles. Minister of Heavy Industries and Public Enterprises Prakash Javadekar said on Friday that the government is considering the automobile industry’s demand for a 10 per cent reduction in the GST rate on all types of vehicles. The government is going to announce it soon.
Government will bring vehicle scrap policy
Prakash Javadekar said that the government has received inputs from various stakeholders and an incentive based vehicles scrap policy is ready. It will be announced soon. It is noteworthy that the auto industry is demanding timely implementation of the vehicles scrap policy to cut GST rates and revive demand in the post-Corona virus crisis. Vehicle sales in the domestic market declined by 75 percent in the first quarter of the current financial year.
Industry badly affected due to coronavirus
India’s automobile industry has been badly affected by the outbreak of coronavirus. The production of vehicles remained completely closed in lockdown and demand remained negligible. Vehicle manufacturing’s April sales report was zero. However, now that the industry is recovering, demand has picked up. SIAM President Rajan Vadhera said the passenger vehicles segment witnessed the longest slump in the last two decades.
Similarly, commercial vehicles faced the second-longest recession in the last 15 years. He said that the two-wheeler vehicle segment has also seen a continuous slowdown for six quarters.
Maruti Suzuki MD & CEO Kenichi Ayukawa said that we can say that we have made a comeback in August compared to last year. However, it would not be correct to compare with last year, as the industry had recorded negative growth of 15-25 percent during that time. This has left the industry behind for many years. #24x7newsalert
