Centre open to raise auto sector's plea at GST Council | WeForNews | Latest News, Blogs Centre open to raise auto sector’s plea at GST Council – WeForNews | Latest News, Blogs
Connect with us

Auto

Centre open to raise auto sector’s plea at GST Council

The GST council’s next meeting is scheduled in Goa on September 20.

Published

on

Auto Sector Automobile

New Delhi, Sep 6 (IANS) The central government is open to take the industry’s proposal on reducing the Goods and Services Tax (GST) on automobiles to the GST Council.

Speaking at the ACMA annual convention here on Friday, Minister of State for Finance and Corporate Affairs Anurag Thakur said the government had received several representations from various stakeholders, including automobile dealers, OEMs and car manufacturers, regarding the reduction in GST rate from 28 per cent to 18 per cent.

The industry has demanded that the GST should be brought down to 18 per cent to reverse the consumption slowdown.

The Minister asked the auto industry players to reach out to the State Finance Ministers as well as the decision on any change in GST can only be taken by the GST Council.

“Any rate cute in the GST needs to be first approved by the GST Fitment Committee and then by the GST Council. I request all of you to also reach out to State Finance Ministers, who are part of the GST Council… We are open to take it (rate cut proposal) to the GST Council, deliberate it there and most of the decisions are unanimously been taken in the previous GST Council meetings,” he said.

The GST council’s next meeting is scheduled in Goa on September 20.

He said that government is listening to the industry and at the same time taking quick policy decisions to address these concerns raised by various sectors.

Further, the minister called for the industry to re-align their strategy given that consumers preferences are changing.

Union Minister of State for Parliamentary Affairs and Heavy Industries & Public Enterprises Arjun Ram Meghwal, who also attended the event said that he expects rationalisation of tax rates levied on auto parts soon and that export incentives might be considered for the sector.

The automobile component manufacturers faces a unique tax structure as most of their products attract GST tax at 18 per cent, while some high-end parts attract a rate of 28 per cent.

He termed the auto sector’s woes as minor and which will be settled very soon as the Centre is aiming to make India a $5 trillion economy.

The automobile sector is suffering sales downturn due to factors like high GST, farm distress, stagnant wages and liquidity constraints. Inventory pile-up and stock management of unsold BS-IV vehicles too have become a problem for the sector.

Consequent to the slowdown, the Finance Minister Nirmala Sitharaman had, on August 23, announced that government departments would be allowed to buy new vehicles.

In addition, automobiles purchased till March 31, 2020, can avail the benefit of additional depreciation of 15 per cent, with total depreciation up to 30 per cent.

Even BS-IV vehicles bought till March 31, 2020, would remain operational for their entire registration period.

Lately, all major OEMs consisting of passenger, commercial, two and three wheeler manufacturers have reported a massive decline in domestic sales.

Figures from the Society of Indian Automobile Manufacturers (SIAM) showed that industry which has recorded an overall decline of 18.71 per cent in off-take for July, the highest monthly sales de-growth in the last 19 years. August figures are still awaited

Auto

Hero MotoCorp, Maruti top gainers on ‘historic’ Friday

Stocks of two-wheeler major Hero MotoCorp settled 13.19 per cent or Rs 334.05 higher at Rs 2,866.50 per share.

Published

on

By

Mumbai, Sep 20 (IANS) As Indian stock markets surged to decade-high gains on Friday following Finance Minister Nirmala Sitharaman’s announcement of corporate tax rate cut among other measures, Hero MotoCorp and Maruti Suzuki India were the best performing stocks on the Sensex.

Stocks of two-wheeler major Hero MotoCorp settled 13.19 per cent or Rs 334.05 higher at Rs 2,866.50 per share.

Earlier in the day it surged 19 per cent to touch an intra-day high of Rs 3,015.60 per share.

Shares of Maruti Suzuki India which surged by 18.6 per cent during the intra-day trade, settled at Rs 6,585.25 per share, higher by Rs 646.95 or 10.89 per cent from the previous close.

Among the the other major gainers on the Sensex were IndusInd Bank, which closed 10.74 per cent higher at Rs 1,419.60, Bajaj Finance (10.19 per cent higher at Rs 3,705.60), State Bank of India (10.09 per cent up at Rs 301.70).

Following the major announcements earlier in the day, Indian benchmark indices logged the biggest-ever gains in over 10 years as the government slashed the effective corporate tax rate to about 25 per cent from 30 per cent.

Sensex advanced by a massive 1921.15 points to 38,014.62 and the broader Nifty jumped to 11,275.45 after gaining 570.65 points or 5.33 per cent.

The only stocks which lost on the Sensex were PowerGrid, Infosys, Tata Consultancy Services, NTPC and Tech Mahindra

Sitharaman announced lowering of corporate tax rate on domestic companies to 22 per cent subject to such entity not availing any exemptions and incentives. Also, these companies will not be required to pay any Minimum Alternate Tax (MAT). Effective tax rate in this case would be 25.17 per cent, including cess and surcharge.

Further, the ‘super-rich’ tax will not apply on capital gains arising from the sale of any security, including derivatives in the hands of Foreign Portfolio Investors (FPI).

To provide relief to the listed companies which have already made a public announcement of buyback before July 5, 2019, the government announced that tax on buyback of shares in case of such companies shall not be charged.

These measures also boosted the investor sentiments in the market.

Commenting on the measures, Mustafa Nadeem, CEO, Epic Research said: “This is huge for the market. There were few announcements that were keeping sentiments in check as the Finance Minister was trying to boost market sentiments and improve the state of the economy by boosting exports, banks consolidation, recapitalisation and so on but reducing the corporate tax rate to 22 per cent or domestic players and 15 per cent for new entrants setting up manufacturing units is a big boost. It has two important effects.

“One the domestic environment which was sluggish due to slowdown is going to fade with lowered corporate taxes,” Nadeem said.

Continue Reading

Auto

Tata Motors Group August global wholesales down 32%

Published

on

By

Mumbai, Sep 12 (IANS) Tata Motors Group on Wednesday reported a decline of 32 per cent in August’s global wholesales, including that of Jaguar Land Rover, over the corresponding period of last year.

According to the company, the global wholesales during the month under review declined to 72,464 units.

“Global wholesales of all Tata Motors’ commercial vehicles and Tata Daewoo range in August 2019 were at 25,366 nos, lower by 45 per cent, over August 2018,” the company said in a statement.

“Global wholesales of all passenger vehicles in August 2019 were at 47,098 nos, lower by 22 per cent, compared to August 2018.”

As per the statement, global wholesales for Jaguar Land Rover were 39,615 vehicles.

Continue Reading

Auto

Auto, manufacturing firms shed one-third share value in a year

Latest data shows that automobile sales for the month of August hit the lowest since 1997-98.

Published

on

By

Auto sector slowdown

Mumbai, Sep 10 : The ongoing economic slowdown in the country has claimed the livelihood of lakhs of people. New projects and investments have been put on hold, while a revival could take longer as investor confidence in companies cut a sorry picture at the exchanges.

Data from the bourses suggest that in just the past one year, the automobile and manufacturing companies, have seen over one-third of their share value getting eroded, on average, indicating a sharp decline in these companies’ abilities to raise capital in the market.

During the period in consideration, the Nifty metal index has lost the most among the 11 sectors constituting the benchmark index.

Manufacturing companies like SAIL and Jindal Steel, which constitute the metal index, declined by 35 per cent, on an average

Not a distant second was the auto index, which fell over 33 per cent.

Among the 15 constituent stocks of the auto index, Tata Motors, Motherson Sumi Systems and Ashok Leyland have been worse hit, losing 55 per cent , 66 per cent and 51 per cent, respectively. Bajaj Auto seems to have bucked the trend, coming down merely 2 per cent amid companies severely hurt owing to the slowdown.

Latest data shows that automobile sales for the month of August hit the lowest since 1997-98.

Steel companies are witnessing a similar trend. The state-owned Steel Authority of India (SAIL) has lost over 57 per cent, while Jindal Steel has also shed over half of its share value in the last one year.

Six of the 15 companies constituting the index have lost over 40 per cent of their share value.

The state-run bank index – Nifty PSU Bank index – despite a slew of measures that have been announced for the sector, has yet to regain investor interest. The PSU (public sector undertaking) bank index has declined by 21 per cent during the same period.

The Nifty pharma index – investment in which firms are considered to be relatively safe during downturns, and, therefore, called defensive investments — fell 22 per cent.

The Nifty media index also also shed over 30 per cent.

(Ravi Dutta Mishra can be contacted at [email protected])

Continue Reading
Advertisement

Most Popular