Budget 2019: Maruti Suzuki calls for reduction in taxes on automobiles in order to create demand, develop industry

  • Currently, automobiles attract peak GST rate of 28 percent with additional cess ranging from 1 percent to 15 percent depending on length, engine size and type

  • The call for a reduction in taxes on automobiles comes in the backdrop of a decline in domestic passenger vehicles (PV) sales, which dropped in December 2018 for the fifth time in the past six months

  • In the April-December period of this fiscal, PV sales in India grew by 4.37 percent to 25,33,221 units, against 24,27,046 units in the year-ago period, according to SIAM data

New Delhi: Tax on automobiles in India is higher compared to many other countries and there is a need to reduce it in order to create demand and develop the industry, Maruti Suzuki India Managing Director and Chief Executive Officer Kenichi Ayukawa said Wednesday.

Currently, automobiles attract peak GST rate of 28 percent with additional cess ranging from 1 percent to 15 percent depending on length, engine size and type.

 Budget 2019: Maruti Suzuki calls for reduction in taxes on automobiles in order to create demand, develop industry

Representational image. Reuters.

"Compared to other countries, tax is a bit high (here in India). In order to develop the industry, we have to ask the government to reduce taxes, which we understand is not easy," Ayukawa said.

He further said, "We have to collaborate with the government to try to find some solution. In order to encourage demand, the best way is to reduce taxes."

When asked about expectations from the Budget, he said the upcoming interim Budget "might be tentative".

"The Budget that would come after the elections could be important. Of course, we are constantly communicating with the government to encourage the industry with reduced taxes. We know that it is not easy," Ayukawa added.

The call for a reduction in taxes on automobiles comes in the backdrop of a decline in domestic passenger vehicles (PV) sales, which dropped in December 2018 for the fifth time in the past six months.

cards2

In the April-December period of this fiscal, PV sales in India grew by 4.37 percent to 25,33,221 units, against 24,27,046 units in the year-ago period, according to SIAM data.

In December, MSI had cut its sales growth forecast for the current fiscal to 8 percent mainly due to subdued demand on account of high-interest rates and increased insurance cost. It had earlier projected double-digit growth for 2018-19.

Follow full coverage of Union Budget 2019-20 here

 

 

To keep watching India’s No. 1 English Business News Channel – CNBC-TV18, call your Cable or DTH Operator and ask for the Colors Family Pack (inclusive of 24 channels), available for Rs. 35/- per month, or subscribe to the channel for Rs. 4/- per day.

To keep watching the Leader in Global Market & Business News – CNBC-TV18 Prime HD, call your Cable or DTH Operator and ask for the Colors Family HD Pack (inclusive of 25 channels), available for Rs. 50/- per month, or subscribe to the channel for Rs. 1/- per day.

Updated Date: Jan 23, 2019 17:54:01 IST