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Gadkari urges Sitharaman to cut GST on passenger vehicles

Gadkari urges Sitharaman to cut GST on passenger vehicles

With an expected upside in the revenues from GST as well as vehicle registration as a fallout of the policy, the ministry of road transport and highways believes that relief should be transferred to potential buyers opting for it

New vehicle scrappage policy is likely to jack up the revenues for both central as well as state governments New vehicle scrappage policy is likely to jack up the revenues for both central as well as state governments

Union Road Transport Minister Nitin Gadkari has urged Finance Minister Nirmala Sitharaman to reduce Goods and Service Tax (GST) on passenger vehicles as the new vehicle scrappage policy announced by his ministry today is likely to jack up the revenues for both central as well as state governments.

With an expected upside in the revenues from GST as well as vehicle registration as a fallout of the policy, the ministry of road transport and highways believes that relief should be transferred to potential buyers opting for it.

Announcing the details of the policy today, Gadkari said, "I have asked 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." Passenger vehicles fall under the 28 per cent GST slab.

The final decision rests with the Ministry of Finance. "It is their prerogative. We have made a request. Last decision will be theirs," Gadkari added.

It may be noted that all the policy decisions related to GST are taken by the GST Council, which is the apex decision making body on GST. The Union Finance Minister heads the council while the state finance ministers are the members of the council.

The GST Council is expected to meet this month to discuss a slew of measures, including inverted duty structure in various sectors which is impacting the small and medium enterprises.

Also, the government has given indications that no tax slab related changes will be made in the upcoming meeting as the government would first like to let the tax revenue stabilise after the COVID-led disruptions.

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