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Recent Tax Cuts to Increase Sales of Automobile Sector

Lower automobile costs resulting from the recent tax sops announced to prop-up growth and reverse the economic slowdown and accelerate sector's sales

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automobile, cars, tax, growth
Not just reduced prices but even an expected up-tick in investment, courtesy the savings afforded by the tax sops, will aid the commercial vehicle segment. Pixabay

Lower automobile costs resulting from the recent tax sops announced to prop-up growth and reverse the economic slowdown, along with the upcoming festive season offers, have the potential to accelerate the sector’s sales, industry insiders said.

Market observers contended that reducing effective corporate tax rate to 25.17 per cent (inclusive of all cess and surcharges) from 30 per cent for all domestic companies will allow more auto firms to reduce prices.

At present, Maruti Suzuki has announced an immediate Rs 5,000 cut in the prices of its bestselling cars.

Besides, other companies such as Bajaj Auto, Piaggio India and Isuzu Motors India too have announced festive season discounts.

“Lower prices can increase demand incrementally, but cannot be expected to boost demand significantly,” Sridhar V., Partner at Grant Thornton India LLP, told IANS.

“Increase in liquidity will also help in increasing borrowings and thereby impacting buyers’ interest positively,” he added.

According to Fitch Ratings Associate Director Snehdeep Bohra: “Lower tax can help auto OEMs cut prices.

“But the overall scope for price reduction (as percentage of existing price) may not be very big in itself to spur demand… Improvement in sentiment and passing on of lower interest rates will be key.”

Not just reduced prices but even an expected up-tick in investment, courtesy the savings afforded by the tax sops, will aid the commercial vehicle segment.

“The effective corporate tax reduction is indeed a big supply side reform and should help spur investment cycle, which has been perpetually crippled,” Madhavi Arora, economist with Edelweiss Securities, told IANS.

“However, the supply side tax reforms generally have relatively long term economic returns, albeit impacting the revenue side in the near term,” Arora said.

At present, the automobile industry is suffering from a slowdown caused by several factors such as high GST rates, farm distress, stagnant wages and liquidity constraints.

automobile, cars, tax, growth
The key sectors to benefit from GST rate cuts are hotels, gems & jewellery, defence and automobiles. Pixabay

The industry’s sales and production levels have dramatically plunged, leading to job losses. In August, all major Original Equipment Manufacturers (OEMs) comprising passenger, commercial, two and three-wheeler manufacturers have reported massive decline in domestic sales.

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As per the Society of Indian Automobile Manufacturers’ (SIAM) August sales figures, the overall sectoral offtake in the domestic market has plunged 23.55 per cent to 1,821,490 units, from 2,382,436 units sold during the corresponding month of the previous year.

Moreover, the industry has estimated that around 15,000 contractual manufacturing jobs have been lost and another million are at risk if the slowdown is not reversed. (IANS)

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The Challenges, Growth and Prospects of Olive Oil Industry in India

Discussing the growth, prospects of olive oil in India

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Olive oil
For the first time in the country, experts in India will hold a panel discussion about the olive oil industry. Pixabay

BY PUJA GUPTA

For the first time in the country, experts in India will hold a panel discussion on the challenges, growth and prospects of the olive oil industry on the 13th of December at PHD Chamber of Commerce & Industry.

Rahul Upadhyay, President and Akshay Modi, Vice-President at The Indian Olive Association (IOA) will be hosting the Annual Public at the Lakshmipat Singhania Auditorium. The session will discuss the transition of olive oil from being a foreign oil to a homegrown oil with which the citizens of India can now reckon with.

The panel moderated by senior food and travel writer Rupali Dean will spearhead the session on Olive Oil In India-2.0. The panel of speakers will include noted restaurateurs, chefs, nutritionists, food researchers and biologists, entrepreneurs, retailers, food, health and fitness experts.

Olive oil india
The Indian Olive Association focuses on the problems confronting the emerging sector of olive oil and table olives in India. Pixabay

Upadhyay said, “The Indian Olive Association focuses on the problems confronting the emerging sector of olive oil and table olives in India. With Annual Public Session, we attempt to bring together the doyens from the food and health industry to discuss the problems and offer solutions that will accelerate the growth of olive oil in India.”

Akshay Modi, Vice-President at The Indian Olive Association (IOA). “The Annual Public Session is a platform that brings together all the diverse stakeholders to speak a unified voice for the greater good of the category of olive oil in India.”

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The Indian Olive Association (IOA), the national apex association of olive oil producers, growers, distributors, importers, users and consumers in India works to promote consumption and expand the market for olive oil and table olives. The association focuses on the problems confronting this emerging sector in India. Macro-economic factors like GST, Import Duty and issues with respect to the import of both table olives and olive oil are taken up by IOA with multiple authorities to streamline the import process and ensure a steady growth for this category. (IANS)