Finance Minister Nirmala Sitharaman said that to boost demand in the automobile sector several temporary relief measures will be introduced including an increased depreciation cost for automobiles for corporates and businesses, however, she stopped short of giving a GST cut for automobiles, something the industry has been lobbying for.
All BS-IV vehicles purchased upto March 2020 will remain operational for their entire period of registration, the Finance Minister said at a press meet today.
An additional 15 percent depreciation will be provided on vehicles acquired from now till March 2020, taking the total depreciation to 30 percent.
The government announced a slew of measures to kick start India’s auto sector, which has been going through a slump for the past nine consecutive months, up until July.
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The finance minister said that the government will also consider a ‘scrappage policy’, something which the automobile industry has been advocating for, to get unfit vehicles off the roads and thus increase the demand for new vehicles. However, she said that scrapping infrastructure is required to put such a policy in place and the government will first try and get that in place.
Further, the increase in the one-time vehicle registration fee, which the government had earlier mooted, will be deferred until June 2020. The automobile industry had argued that an increase in the vehicle registration fee would further hurt demand.
Source: Economic Times
