Policy

Plan to suggest tax rebate under vehicle scrappage policy: Nitin Gadkari

Our Bureau | | Updated on: Nov 23, 2021
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The Minister of Road Transport and Highways will talk to FM in this regard; final decision to be taken at GST Council

The government on Tuesday said it expects the automobile industry revenue to double to ₹15 lakh crore (from ₹7.5 lakh crore) in the next five years and added that it is considering a proposal to provide more tax-related concessions on vehicles that are purchased after scrapping old vehicles.

Speaking at the inaugural session of Maruti Suzuki Toyotsu India (MSTI) vehicle recycling centre, Nitin Gadkari, Minister of Road Transport and Highways (MoRTH) said, “This is the second such centre in India and I am happy that co-operation from the auto industry is coming. I expect 200-300 more centres to come up in next two years.”

Gadkari said he will also approach the Finance Minister on giving some rebates on the GST to customers buying new vehicles, after scrapping the old ones. “The GST revenue of both the Centre and States will rise due to the scrappage policy... I will discuss with the Finance Ministry on how to provide more (tax-related) concessions under the new vehicle scrappage policy,” he said.

Benefit for buying new vehicles

Under the new policy, the Centre had said the States and Union Territories (UTs) will provide up to 25 per cent tax rebate on road tax for vehicles that are purchased after scrapping old vehicles.

“I will also urge and suggest the automobile companies to give benefits of ₹1-1.5 lakh on purchase of new vehicles to customers who come with scrappage certificates from these centres. This would also help them sell more vehicles. I will also be meeting the Finance Minister in next few days and would request for some concessions, but the final decision (on providing more incentives under the National Automobile Scrappage Policy) will be taken by the Finance Ministry and the GST Council,” he said.

MSTI is a joint venture (JV) between Maruti Suzuki India (MSIL) and Toyota Tsusho Group (Toyota Tsusho Corporation and Toyota Tsusho India Private Limited) with each owning 50 per cent equity. The JV company has invested ₹44 crore to set up the facility.

Speaking at the occasion, Kenichi Ayukawa, Managing Director and Chief Executive Officer, MSIL, urged the government for detailed policies for vehicles to be inspected from time to time. “Like in all other major automobile markets, we need a detailed policy that requires vehicles to be inspected and certified to be road-worthy every three or four years or a scientific based frequency. I hope that my suggestion for a fitness policy will meet your kind consideration,” he said.

“Like in all other major automobile markets, we need a detailed policy that requires vehicles to be inspected and certified to be road-worthy every three or four years or a scientific based frequency. I hope that my suggestion for a fitness policy will meet your kind consideration,” he said.

Ayukawa, who is also the President of Society of Indian Automobile Manufacturers (SIAM), said it is important to regularly check the road worthiness and environment friendliness of these vehicles so that a car is safe for use on the road, and for this it may not be recommended to wait for 15 years.

Naoji Saito, CEO for Metal Division of Toyota Tsusho Corporation said, “The Toyota Tsusho group has engaged in the End-of-Life Vehicle (ELV) recycling business since 1970 in Japan. Recently we have run the environmental friendly ELV dismantling and recycling business in several major countries of the world. Our experience of over 50 years in Japan helped in these projects. Now we will achieve the best practice for ELV recycling and contribute to the circular economy in India by combining our experience and equipment made in India.”

Published on November 23, 2021

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