Whiff of hope for big cars

New Delhi, Sept. 7: Finance minister Arun Jaitley is “seriously” considering the demand of automobile manufacturers who have voiced concern over the rise in cess on premium vehicles, Union heavy industries minister Anant Geete said today.

“We have requested the finance minister (on the cess issue). Industry has given its memorandum and we have forwarded that to the finance minister and he is seriously considering that,” Geete told reporters on the sidelines of Siam’s 57th annual convention.

Premium vehicle manufacturers had hit out at the move to hike the cess on large cars and sports utility vehicles (SUVs) to 25 per cent, saying it was against the spirit of liberal market dynamics and would affect the future plans of expansion under the Make in India initiative.

Toyota Kirloskar Motor, Mercedes-Benz, Audi and BMW were unanimous that the increase in cess on large, luxury cars and SUVs that had become cheaper after the GST rollout would dampen the spirits of the industry across the entire value chain.

The companies feel that a constant shift in policy makes long-term planning for the market highly risky, and it will only have an adverse impact on the country’s financial ratings.

The government has notified the hike in the GST cess on a range of cars – from mid-sized to hybrid variants to premium ones – to a maximum of 25 per cent from 15 per cent now.

Geete also said that the ministry had given a six-month extension to the FAME India Scheme (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India).

“We are promoting hybrid and electric cars… The main cost of electric car is lithium battery, so we are trying to see how we can cut the battery price,” he told reporters.

Speaking at the inaugural session of the event, the minister said the government was committed to supporting the sector in all possible way.

Niti Aayog CEO Amitabh Kant said the auto secto played a critical role in the country’s growth and development.

“The policy regime has to be predictable, it must be consistent and there must be clarity … and government and courts must keep them at arms length,” he said.

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