(www.arya-tv.com)Union Minister Nitin Gadkari submitted proposal to GST council to cut down GST on passenger vechicle.
On the platform of Arya Media Networks, Vishal Saxena, Special Correspondent presented a detailed coverage on the proposal to cut down GST on passenger cars & Vechicle scrappage policy.
In my last cover story, I explained how GST affects the car prices & increase the car prices minimum 29% to 50% (Total tax including Cess). Now, It is a matter of great happiness for 15 years old vehicle owners who wish to buy new car, if the GST is reduced & implemention of new vechicle scrappage proposal will be done in the right way.
Union minister Nitin Gadkari has urged Finance Minister Nirmala Sitharamana to slash down GST on passenger vehicles in view of the new scrappage policy.
His appeal comes in view of the new vehicle scrappage policy that has been announced by his ministry.
Gadkari, Union Minister for Road Transport and Highways, said that the scrappage policy will increase revenues for both central and state governments. He believes that additional relief should be transferred to potential car buyers who opt for the new vehicle scrappage policy.
While announcing details of the policy, Gadkari said, “I have asked the finance minister to consider a GST concession to the potential buyers opting for vehicle scrappage policy.”
Old vehicle will be scrapped and once the customer will buy a new vehicle, both central government and the state governments will get revenues to the tune of Rs 30,000 crore to Rs 40,000 crore,” he added.
Further it is proposed that on buying of new vechicle buyer shall get a discount upto 25% on Road Tax registration and car manufacturers will offer 5% discount on buying of new vechicle. Scrap value shall be in between 4 to 6% of the particular vechicle.
It may be noted that passenger vehicles fall under the 28 per cent GST slab and any reduction for those who opt for the policy will be hugely beneficial in making the scrappage policy a success.
However, the final decision on whether such concession will be given can be taken by the finance minister and the GST Council, which is the top decision- making body on matters related to the indirect tax.
“It is their prerogative. We have made a request. Last decision will be theirs,” Gadkari said.
It remains to be seen whether the GST Council considers Nitin Gadkari’s appeal when it meets later this month. The council is also expected to discuss several other issues such as the inclusion of petroleum products under the GST net.
Minister Nitin Gadkari said the vehicle scrapping policy will be a “win-win” policy that will help improve fuel efficiency and reduce pollution. Making a statement regarding the vehicle scrapping policy in the Lok Sabha, the Road Transport, Highways and MSMEs Minister said the policy will bring about a major change in the country. It also seems as if older cars will be allowed to ply legally on the road.
Further to the Nitin Gadkari’s announcement on Vehicle Scrappage policy, President SIAM said “The benefits to environment and safety of a sound system of removing unsafe or unfit vehicles from the road have been felt strongly by all stakeholders. The most important step is to build an infrastructure of testing and scrapping centers fast all over the country and SIAM will work on this front with the government. Mandatory scrapping of +15 year old Government vehicles from 1st April 2022 is a step in the right direction.”
We must know the difference of Current Rules and Change of rule in new scrappage policy.
Current rules are:
According to the current rules and regulations, a private vehicle be it a car or two-wheeler is issued a registration certificate which is valid for 15 years. Thereafter, the owner has to take the car to the same RTO where the car has been registered for a fitness test. The fitness test is currently a manual event and a representative from the RTO scrutinises the vehicle. Among the list of checks include functioning of lights, indicators, brakes and general health of the car. Once the car is deemed ‘fit’ by the representative, a Fitness Certificate is granted. The car or bike then is allowed to ply on the road for another five years after which the vehicle has to go through the same test again.
New Vehicle Scrappage Policy will bring below changes:
According to the new Vehicle Scrappage Policy, the process of getting a fitness certificate will become far more stringent. Automated workshops will spring across the country and one has to ensure that the vehicle taken to these centres are properly fit. This is primarily because human intervention will be drastically reduced and computers will take charge. For example, if the vehicle on the test bed has misaligned headlamps or if the headlamps are not powerful enough, the computer will give it a ‘fail’. The moment the vehicle fails on any of the important parameters, a fitness certificate will not be provided. According to latest statements, vehicles which fail, will be deemed ‘EOLV’ or End of Life Vehicle. Then the owner will be given an option to scrap the vehicle at designated RVSFs or Registered Vehicle Scrapping Facilities. We are yet to find out whether the owner will get a chance to rectify the issues and reappear for the test.
Costs related to retaining your old vehicle:
Most of the details regarding costs are kept under wrap. However what we have learnt is that retaining your old vehicle will involve higher costs. This is to ensure that people do go out and scrap their old cars and bike and buy new ones. However the government is keeping the option of retaining old cars as an option. First and foremost the cost of getting a fitness certificate will be more expensive than what it is currently. Then there is the road tax which has to be paid by the owner. An additional Green Tax will also be levied on cars more than 15 years old. The Green Tax amount will be confirmed by individual states. So in a highly polluted area, the Green Tax will be substantially more than in a less polluted zone.
