Tata Motors bats for GST cut, says move could benefit entire PV industry

Automobiles currently attract GST of 28 per cent with additional cess ranging from 1 per cent to 22 per cent.Tata Motors says there has been a significant escalation in cost due to the transition from BS 4 to BS 6 emission regime.
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| Updated on: 26 Oct 2020, 05:02 PM
File photo: Tata Motors has said that reduction in GST will help consumers who are going through low buying sentiments because of uncertain and precarious outlook for the economy. (AFP)
File photo: Tata Motors has said that reduction in GST will help consumers who are going through low buying sentiments because of uncertain and precarious outlook for the economy. (AFP)
File photo: Tata Motors has said that reduction in GST will help consumers who are going through low buying sentiments because of uncertain and precarious outlook for the economy. (AFP)
File photo: Tata Motors has said that reduction in GST will help consumers who are going through low buying sentiments because of uncertain and precarious outlook for the economy.

Any kind of support from the government in terms of GST reduction would help the passenger vehicle segment immensely as it would negate some of the price increase in vehicle prices due to the shift to stricter BS 6 emission norms, according to a top Tata Motors executive.

In an interview with PTI, Tata Motors President, Passenger Vehicles Business Unit, Shailesh Chandra said the reduction in vehicle prices would even help end customers who have been facing various pressures owing to the current state of the economy.

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"Due to this transition from BS 4 to BS 6, there has been a significant escalation in cost. In these trying times customers are not very confident about the outlook how the future is going to be including their salaries and jobs. On top of that there has been an increase in vehicle prices. It definitely impacts the industry immensely and any support by the government to reduce GST to offset some of the price increase will definitely boost the whole PV industry," Chandra noted.

(Also read | Tata Motors is actively scouting for a partner for passenger vehicle business)

He was replying to a query whether lowering of GST would help revive the industry. The Indian automobile industry leapfrogged to BS 6 emission standards from BS 4 from April 1 this year.

While auto companies put in around 40,000 crore to upgrade their facilities and products, the auto components industry chipped in with an investment of 30,000 crore for the same.

Chandra said there has been a significant escalation in cost due to the transition from BS 4 to BS 6 emission regime.

(Also read | Tata Motors crosses 40 lakh cumulative production milestone in India)

“It (reduced GST) will help consumers who are going through low buying sentiments because of uncertain and precarious outlook for the economy and their source of income. So definitely it will be helpful to boost the volumes for the passenger vehicle industry," he said. Currently, automobiles attract GST of 28 per cent with additional cess ranging from 1 per cent to 22 per cent.

Electric Vehicles

File photo: Tata Nexon EV.
File photo: Tata Nexon EV.
File photo: Tata Nexon EV.
File photo: Tata Nexon EV.

When asked about the electric vehicle segment, Chandra said the government has done its part and it was now up to the ecosystem players to participate in the process.

“As far as the government is concerned, the trust they have been bringing to electrification is something which very few governments across the world have done. Significant capital has been diverted towards the FAME scheme and others including charging infrastructure and R&D," Chandra said.

It is now up to the manufacturers now to scale up their operations, he added.

"Government has done a lot and the only thing that the government can consider is giving FAME scheme benefits to the personal car segment as well. Incentives currently are being directed towards shared mobility and it is not gaining traction as during the pandemic the fleet segment has got impacted a lot," Chandra said.

(Also read | Tata Nexon EV becomes costlier. Here are the new prices)

Personal car segment is 90 per cent of the industry and even a lower penetration of this 90 per cent segment would bring more visibility to the electric segment in the country, he added.

“Demand can be triggered through personal segment. Keeping that in mind if FAME incentives are also provided to personal segment electric cars which meet the criteria of price, localisation, range it will just accelerate the process of electrification in the country," Chandra noted.

Tata Motors currently sells Nexon EV and two trims of Tigor with different range outputs. During the July-September quarter, the company has sold over 900 electric vehicle units. Since January, over 1,500 units of the Nexon EV have been sold.

“We believe in the future of electric mobility. We already have two versions of Tigor, we have Nexon EV, and we have announced Altroz EV, something which we are working on. There will be additional versions and products which will come in the coming years," Chandra said.

First Published Date: 26 Oct 2020, 03:50 PM IST
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