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Tax cuts on cars could boost industry, benefit economy: Vikram Kirloskar


According to Toyota Kirloskar Motor Vice President Vikram Kirloskar, a roadmap to halve the tax on autos over a 10-year period to make the Indian auto industry more globally competitive and provide large-scale employment. to benefit the economy.

Via:
PTI

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Update on:
November 27, 2022, 14:28 pm

Toyota Kirloskar Motor Vice President Vikram Kirloskar said car prices increased by 30 to 50 percent compared to the cost of production due to various taxes.  (PTI)
Toyota Kirloskar Motor Vice President Vikram Kirloskar said car prices increased by 30 to 50 percent compared to the cost of production due to various taxes. (PTI)

Also read: Uttar Pradesh becomes automotive hub; Electric vehicles to be exported abroad: CM Yogi

While India can’t afford to drastically cut the tax rate on cars at the moment, he said a tax reduction scheme for the industry could be considered considering the industry’s contribution to the country’s overall GDP. country.

“The auto industry is highly taxed. If we look at an automobile at the time it is manufactured and sold, in most cases it is 30 to 50 percent higher than the export price. factory (after adding) GST and all other taxes, including road tax,” he told PTI in an interview.

He added: “We are a very competitive industry. I think in the world, in terms of reasonable cost, reasonable quality, we have become quite competitive. So I think the tax reduction plan. over a period of time will really benefit the industry.”

Over a 10-year period, he added, “Can you cut it in half?… maybe make a long-term plan on how to lower taxes in the auto industry to make it grow. sizable development, which would make it even more competitive for domestic and export and provide large-scale employment and benefits to the economy?”

Currently, cars are taxed at 28% GST, with an additional tax of 1% to 22% depending on the type of vehicle. Imported complete units (CBUs) are subject to customs duties ranging from 60% to 100% depending on engine size and cost, insurance and freight (CIF) values ​​lower or higher than $40,000.

Kirloskar stressed that such a gradual tax cut would also benefit the country in terms of jobs and boost economic growth.

“The auto industry is a huge source of job creation — from steelmaking to pig iron, raw materials and dealerships,” he said, adding, “It’s an important part of the economy. economy, accounting for 7-8% of GDP. “

However, he also admitted that a sharp cut in auto taxes at this time is not a viable idea.

“We are a country that cannot afford…I have never asked for a reduction in GST. I am only saying because is it possible to make a long-term plan and how to reduce taxes in the umbrella industry. to make it grow quite large, which will make it even more competitive for domestic and export, while also providing large-scale jobs and benefits to the economy?” Kirloskar added.

Responding to a request from an auto industry section to reduce customs duties on imported electric cars to promote the electrification of cars in India, he said, “Why can’t you do this? be here?”

Kirloskar said companies need to develop supply chains in India to increase localization.

First published date: November 27, 2022, 14:28 PM IST

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