Federation of Automobile Dealers Association (FADA) has requested the Finance Ministry to reduce Goods and Services Tax (GST) to 18 percent stating that two-wheelers are not a luxury item and hence GST rates need to come down.
FADA, which represents over 15,000 automobile dealers having 26,500 dealerships, said, it is noteworthy that two-wheelers are used not as a luxury thing but as a necessity to travel distances, especially by people in rural areas, for their daily working needs. ”Hence the rationale of 28 per cent GST + 2 per cent cess which is for luxury/sin products does not hold good for the two-wheeler category,” FADA added.
Further, FADA has also sought a uniform GST rate of 5 per cent on the margin for all used vehicles, to create a win-win situation for the government, dealers, and vehicle owners. To make the sector grow faster, the association has requested the government to take bold steps. It also urged the government to reintroduce the ‘Depreciation Scheme’ for FY 2022-23.
Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget 2022-23 in Parliament on 1st February 2022