Auto Players Should Take Up GST Rate Cut Demand With State FMs: MoS Finance
Automobile and component manufacturers have been seeking GST cut on automobiles to 18 per cent from 28 per cent
Photo Credit : theneweconomy.com
Amid clamour from the auto industry for a GST rate cut, Minister of State for Finance Anurag Thakur on Friday asked players in the sector to also take up the matter with state finance ministers who are part of the GST Council, and assured all support from the Centre.
Automobile and component manufacturers have been seeking GST cut on automobiles to 18 per cent from 28 per cent to help the sector come out of a prolonged slump that has resulted in job losses.
"You are aware that any rate cut on GST needs to be approved first by the fitment committee then by the GST Council. I request all of you to also reach out to the state finance ministers who are part of the GST Council," Thakur said while speaking here at the annual convention of the Automotive Component Manufacturers Association.
He said the finance ministry has received multiple representations from car manufacturers, dealers and many of the stakeholders regarding the GST rate cut. "Various OEMs (original equipment manufacturers) are based out of various parts of the country. The issue is whether they (the manufacturers) taking these issues with their finance ministers or not,"
Thakur later said while speaking to reporters on the sidelines. He said state finance ministers should be equally aware of the challenges faced by the OEMs or the automobile manufacturers. "Our humble request is to apprise them also so that whenever this issue is discussed in the GST Council meeting, everyone should have their view point," he added.
Thakur had reminded the gathering that Finance Minister Nirmala Sitharaman has already suggested in the last meeting that the Centre was open to take it to the GST Council for deliberation, and most of the decisions were unanimous in the previous GST Council meeting. The next GST Council meeting will be held on September 20 in Goa.
Thakur said the government has already come out with slew of measures to address challenges faced by the auto industry. "So, that is the priority our government is giving to this industry," he said.
"Let me assure you we stand by you at this juncture and we will be there to listen to your challenges as we know you are going to play the most important role in making India a USD 5-trillion economy by 2024-25," he said. The government will consider various measures including the scrappage policy and we are working closely on that as per demand of the industry, he said.
"This industry is going to do well.... (instead of) looking at this as a challenge, we will take it as an opportunity and be among the top-three automobile companies in the world," he said adding that the companies "can do it... whatever decisions we have to take, we will take."
MoS Finance Anurag Thakur heckled
Minister of State for Finance Anurag Thakur was heckled at an ACMA event on Friday after he asked auto industry players why sales had not picked up despite measures taken by government, RBI intervention and big discounts by manufacturers, to which a participant interjected and said it was because of the "demonetisation effect".
Thakur was seeking inputs from industry players on the reasons behind the slowdown, despite government's efforts to support the ailing sector, at the Automotive Component Manufacturers Association of India (ACMA) annual summit here.
Jasbir Singh of GS Auto Ludhiana interrupted the junior finance minister's address, saying "This is the delayed effect of demonetisation. People don't have money!" Thakur, however, kept his composure and repeatedly said "Thank you". Seeking to calm down the atmosphere after the interruption, Thakur said, "If that is the delayed effect (of demonetisation), how do you move ahead form here? How do you go forward?"
"If there is reduction in interest rates after the Reserve Bank of India's recent actions, discounts by companies (have been offered) and many other initiatives have been taken by the central government, why the industry is not seeing the same kind of demand? "Is the demand coming down globally or is it only coming down locally?" he questioned.
"The other issue is people are using cabs more or maybe they are looking at other options like electric vehicles (EVs), BSVI vehicles... What are the main reasons? There could be many reasons for that. Is it just cyclical?" he asked the gathering.