Scrappage policy and GST reduction could help revive the commercial vehicle industry
Considering the impact of the Coronavirus pandemic and the lockdown that has kept the auto industry at a standstill for a while, finally, it is gaining some momentum as the country resumes day-to-day functions in the post-lockdown world.
Manufacturers have rolled out digital means of sales and service along with offering lucrative deals to boost customer sentiment, and it is seen to be working as well. Slowly but steadily, the industry is getting back on its feet. And this would be the appropriate time for the government to provide that extra nudge to help the industry get back on its feet.
Vipin Sodhi, MD and CEO at Ashok Leyland says that a scrappage policy and reduced GST rates could be a great help in reviving the commercial vehicle sector that has been going through a rough patch for a while.
Vipin Sodhi told PTI, "When you look at the commercial vehicle industry, it's core to the country, it is pretty much the core industry, to have it at 28 per cent (GST rate) is something which the industry has put forth to the government in the past and now as well. Will it help? It will help, it could be one of the possible demand triggers. Fundamentally what we are seeing is that each segment of the commercial vehicle industry will have its own trajectory."
The Society Of Indian Automobile Manufacturers (SIAM) has been requesting the government to reduce the GST rates on vehicles and the auto industry body has been urging the government to introduce an incentive-based scrappage policy. The current GST rate on vehicles is 28 per cent and SIAM has been asking to bring it down to 18 per cent. The government is working on a scrappage policy but it is unclear if there will be a reduction of GST rates on vehicles.