Union Budget 2016 - What to expect for the auto industry?
With almost 24 million vehicles being produced every year in our country, Indian automotive industry aims at a gross value of 18.9 trillion rupees ($285 Billion) by 2026, under the Automotive Mission Plan 2016-2026. Union government’s ‘Make in India’ campaign has also convinced a lot of carmakers to use the Indian soil as their manufacturing hub. With such massive production numbers, the upcoming union budget becomes very crucial for the auto sector.
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Here are some provisions that the auto industry expects from the upcoming union budget.
Implementation of GST (Goods and Services Tax)
It will create a uniform tax structure across all states by subsuming all indirect taxes like road tax, R&D taxes and octroi. The used vehicles market will also benefit a lot from the same.
Lower Excise and Custom Duties
The Excise & Customs taxes on recognized parts of hybrid/electric vehicle parts should be made duty free or should be given rebate in excise and custom duties.
- Promoting Hybrid and Electric vehicles
More subsidies should be provided on hybrid/electric vehicles which will contribute to a cleaner environment.
- Lowering rate of interest on vehicles
If the rate of interest is lowered in the upcoming budget, it will incur a positive feeling amongst the buyers, which will lead to better sales of these vehicles.
- Promote manufacturing of spare parts in our country
Localization of spare parts will again help the auto sector as it will result in lower vehicle maintenance costs.
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