GST cut on auto, incentive to scrap old vehicles on SIAM's budget wish list

Passing through one of the longest sales slowdowns, the auto industry has sought reduction of GST on all vehicles to 18 per cent from the current rate of 28 per cent.

Spelling out its Budget wish list, the Society of Automobile Industry (SIAM) has also asked the government an incentive based vehicle scrappage scheme in order to get polluting, unsafe and old vehicles off the road and help them replace with new ones.

During a pre-Budget meeting with finance ministry officials earlier this month, SIAM stated the GST rate on all categories of vehicles be "brought down to 18 per cent from the current rate of 28 per cent".

Bringing down the tax rate will reduce vehicle prices, which will help in spurring demand that has been sluggish for the last 11 months, said an industry executive.

In April, passenger vehicles sales witnessed the steepest decline in nearly 8 years with sales dropping by 17.07 per cent -- the biggest fall since October 2011 -- as weak customer sentiment led by liquidity ..