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My humble suggestions for reviving the auto industry and thus firing one of the engines of economy:
1) Implement vehicle scrappage policy YESTERDAY. Let @nitin_gadkari have a free hand to frame a workable and exciting deal which he can, given his big heart and enterprising mind.
1) Implement vehicle scrappage policy YESTERDAY. Let @nitin_gadkari have a free hand to frame a workable and exciting deal which he can, given his big heart and enterprising mind.
2) VSP is needed ASAP because vehicle dealers would have 10 days to sell 10% of their BS IV stock after the lockdown ends. Dealers would offer huge discounts. Let people sell their vehicles to auto companies with delayed delivery till proper facilities are in place.
3) Offer incentives for buying new vehicles such as Income Tax exemption for first car and also for second car.
4) Reduce GST to flat 18% across all segments. LATER, a condition may be put that the cars should be manufactured in India and 80% of the parts should be manufactured completely in India using raw materials from India.
5) Public transport would be unpopular for middle and high income segments for a long time to come after the #Covid19 trauma ends. People would tend to buy cars and two-wheelers. So, incentives would help further.
6) Controversial suggestion (controversial for tax extremists)
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DELETE Section 269ST of the Income Tax Act. It prohibits spending more than 2 lacs in cash even for personal purposes. The section has a big role in disincentivising consumption.
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DELETE Section 269ST of the Income Tax Act. It prohibits spending more than 2 lacs in cash even for personal purposes. The section has a big role in disincentivising consumption.
The said section was inserted in 2017. Lots of people have money lying with them which they cannot spend because of this section. Lots of people in the hinterland used to earn big money through informal sources (dealing in land/agriculture/taking/giving petrol pumps on
lease and & #39;n& #39; no. of such activities). This money is not accounted for and will never be done in next many years. But, the difference was that they used to spend this money on luxuries such as SUVs. Government used to get 50% tax on these cars. Now, it neither gets IT nor GST.
If cars are not being sold, lots of other employment avenues gets destroyed such as in repairing, servicing, cleaning, driving etc.
Anyways TCS of 1% is applicable on cars. Governments gets its tax and people are bound to file returns. So, the section serves no purpose.
Anyways TCS of 1% is applicable on cars. Governments gets its tax and people are bound to file returns. So, the section serves no purpose.
Digressing from auto industry to which this thread is dedicated. The section dissuades people from spending. Babus sitting in Lutyens Delhi don& #39;t understand how 70% of India in rural areas work. Let people spend. Spending creates value at multiple levels. With the same money
so many people earn and again spend. Revenues would follow with more and more spending. Tax Collected at Source (TCS) was already there on major purchases. Lots of other reporting in form of STF was already there. Department can follow up with people later.
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