Javadekar hints at possibility of GST rate cut for vehicles
Union Minister Prakash Javadekar on Friday lent his weight to the automobile industry’s demand for a reduction in GST rate to boost growth, saying he will discuss the need for a reduction in taxes with the prime minister and finance minister.
The heavy industries minister also said proposal for the auto scrappage policy was ready and all stakeholders have provided inputs, therefore its announcement was likely “very soon”.
Elaborating on the possibility of GST rate cut for the vehicles segment, he said details of the proposals are being worked out by the Finance Ministry and he is not privy to all the details.
However, Javadekar said, “naturally in a logical sequence, two-wheelers, three-wheelers, public transport vehicles, in that category only, and then four-wheelers, in that order it should come. I hope that you will get some good news surely very soon.”
He said he will definitely discuss the automotive industry’s demand for a Goods and Services Tax (GST) reduction with Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman.
The minister said as the industry feels that “this GST reduction will ultimately benefit the government and you are not asking for this permanently, you are asking this for a period, and therefore I will definitely discuss this demand with the finance minister and all concerned, the prime minister also.”
“We may not agree immediately for reduction in GST but that is not a final no. There can definitely be a way forward which I also see, progress will be done,” said Javadekar.
Two-wheelers are neither a luxury nor sin goods and so merit a GST rate revision, Finance Minister Nirmala Sitharaman had said at an industry interaction last month.
She had further said a rate revision proposal would be taken up by the GST Council.
Two-wheelers currently attract 28 per cent GST.
The rates are decided by the GST Council, chaired by the union finance minister comprising ministers in-charge of finance or taxation of all the states.
Javadekar said the government is working with all stakeholders on ways and means to boost demand.