New Delhi: Union Minister for Heavy Industries and Public Enterprises Prakash Javadekar on Friday assured the automobile industry that he will take up the industry's demand for a cut in goods and services tax (GST) for the sector with the Finance Minister and the Prime Minister.
Speaking at the virtual Annual Convention of the Society of Indian Automobile Manufacturers (SIAM), the minister said that the industry will get some concessions going ahead to boost demand, especially the festival demand.
He noted that any decision on GST cut will require the GST Council to take into account the socio-economic impact of the decision.
Citing the ongoing issue of the GST compensation, which Centre has been unable to pay to the states, he said that as already revenues are very low, such decisions on rate cut would have to be thoroughly looked into.
"I hope you will get some good news soon," he said.
As the pandemic has worsened the demand scenario of India's automobile segment, which was already going through a slowdown in the past year or so, industry players have been seeking support from the government to push demand in the form of tax cuts.
Recently, Finance Minister Nirmala Sitharaman also said that the GST Council will look into the proposal of lowering the GST on two-wheelers, which neither come under luxury nor sin goods.
Gadkari exhorts automakers to build flex-engine vehicles to promote alternative fuel
Promising all support to the automobile industry, Union minister Nitin Gadkari on Friday encouraged automakers to introduce flex-fuel engines in India on a large scale to promote alternative fuel in alignment with the government's 'Atmanirbhar Bharat' drive.
To encourage alternative fuel, the government has decided to allow automakers meeting certain criteria to set up own fuel pumps, provided they sell green fuel too, Gadkari said, asserting that carmakers could easily introduce flex engines on par with Brazil, the US and Canada if they could leapfrog from BS-IV norms to BS-VI.
"Government has taken a decision that the companies with a worth of more than Rs 250 crore can start their own petrol/diesels pumps but the condition is that they should have alternative fuel pumps also," Road transport minister Gadkari said addressing SIAM's 60th annual convention 2020 - 'Rebuilding the Nation, Responsibly' through video conference.
Gadkari, who also holds the MSME portfolio, said the vision was to make the Indian automobile industry number one manufacturing hub in the globe and cut on huge annual crude imports bill to the tune of Rs 7 lakh crore by promoting alternative fuel.
Wondering when automakers like BMW, Mercedes, Hyundai, Honda, Toyota and Suzuki could manufacture flex-engine vehicles for the US, Canada and Brazil, Gadkari asked why couldn't they start production in India. The minister urged industry to come forward in this direction.
"We are going to increase the production of biofuel given (there is) surplus foodgrains. I request you all to bring in flex-engine technology which is a proven technology and already your brand companies are using all these technologies in Brazil, in USA and in Canada. Why are they not starting this in India. Think about it. Only a filter has to be used," the minister said.
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Alternative fuel like ethanol, methanol, bio diesel, electric and bio CNG besides LNG were the fuel for future and should be promoted, he said and added a roadmap was being readied for fuel policy.
"We will try to bring an integrated fuel road map defining phase-wise introduction of different options and supporting infrastructure," he said and reiterated that there were initial hesitations during leapfrog to BS-VI emission norms too but this could be implemented through industry's commitment.
Gadkari said the government has fixed the standards for hydrogen fuel cell and electric, and urged automakers to employ the profitability earned through conventional carmaking in research and innovation in this direction too which he said could result in larger exports and employment generation.
"We need your cooperation in alternative fuel choices. We have plans to take the ethanol economy from the present Rs 20,000 crore to Rs 1 lakh crore," the minister said and added that the government is allowing making of ethanol from surplus rice and foodgrains.
Alternative fuel will minimise pollution which is a huge concern, he said.
On battery standards for electric vehicles, the minister said: "I want to assure we will not compromise with the quality and standards. We will specify the quality and standards. We will not allow inferior products."
The minister also emphasised the need for reducing logistics cost and expressed hope that through multiple steps and laying of 22 green expressways, it will be reduced.
Smarter pricing, innovative finance to support auto sales: Goyal
Union Minister of Commerce and Industry Piyush Goyal on Friday asked the auto sector to go in for 'smarter pricing' and offer 'innovative financing' terms for buyers to shore-up their sales.
In connection with the industry's demand for a reduction in GST taxation, Goyal asked the JV auto companies based in India to also ask for a royalty reduction from their parent companies to tide over these testing times.
He also asked the JV companies to seek permission from their parent companies to allow them to export more from India to other countries.
Besides, the Union Minister acknowledged that some sub-segments of the industry have almost reached pre-Covid-levels in August and the overall trend has improved.
According to the minister, the shift towards personal mobility due to the Covid- 19 outbreak will give a push to the industry's off-take.
He pointed out that the committee for the 'Remission of Duties and Taxes on Exported Products' (RoDTEP) scheme might be approached to al low the auto sector get reimbursement of certain taxes to make it more price competitive.
The scheme which is being rolled out in a phased manner allows reimbursement of duties and certain taxes to sectors which have a high export potential.
(With IANS and PTI inputs)
