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Mahindra SOS: Cut taxes or rollback cess as auto gloom deepens

Mahindra said that a welcome first aid would be temporary relief on the GST front or rollback of cess.

Updated: Aug 08, 2019, 07.16 AM IST
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Anand Mahindra offers solutions to pull auto industry out of gloom
Anand Mahindra offers solutions to pull auto industry out of gloom
Mumbai: Anand Mahindra, chairman of Mahindra & Mahindra Group, said the current slowdown in the automotive industry poses a great threat to the 'financial arithmetic' of the government and there is a need for a short-term measure such as GST cut, or a cess removal, to "catalyse consumption" and make auto affordable.

Mahindra also called out for a joint collaboration between industry and the government to carve out a future roadmap for EVs and said that India has the potential to be a global electric vehicle hub.

Speaking at the 73rd Annual General Meeting in Mumbai on Wednesday, Mahindra told shareholders that the most obvious “first aid” would be some temporary relief on the GST front, either by modifying the slabs, or, by removing the cess. He also suggested that the government may re-look at the registration fees which have gone up very substantially and a rollback of the increases in road tax mandated by state governments after the introduction of GST.

“… kick-starting the auto industry with a few short-term measures will serve a greater national purpose, re-energizing the auto industry will have a benevolent ripple effect. The revival of the auto industry would lead to the revival of freight; the revival of freight would lead to the revival of trucks; all this revival would lead to the revival of jobs; the revival of employment would lead to a revival of consumption. And would get us closer to the 5 trillion economy that is our common goal,” said Mahindra.

Mahindra said the automotive industry contributes revenues of over ?1.8 lakh crores to the government treasuries. Citing SIAM estimates, he said that the slowdown has resulted in an 8% loss in GST collection in the first 6 months of 2019 and just to catch up with the FY19 GST collections, the auto industry will need to grow at a rate of at least 7% in the remaining 8 months of the FY20.

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