According to RC Bhargava, chairman of Maruti Suzuki India (The largest automaker in the nation), the regulatory burden on compact automobiles is the heaviest in the entire nation. According to him, Small Cars is a major segment of the Indian car industry, and the sector cannot expand if all vehicles are subject to the same taxation.
He also said that despite the Narendra Modi government’s best efforts, the manufacturing sector is still trailing behind. Bhargava claimed that India’s economic growth rate could have been significantly greater if the manufacturing sector had expanded more quickly. All this is because there is a difference in how things are being done on the ground.
Increased burden of regulatory changes
Bhargava mentioned that small cars are now being purchased less than before this, in his opinion, is not good for the nation or the auto industry. He said the burden of regulatory changes is substantially greater for compact cars than for big one as a result the “behavior” of the entire market has changed.
According to him, consistent growth in the number of new automobile buyers is necessary for the industry’s healthy development. And every year, the number of car owners should rise. He also mentioned that the small car segment is not receiving any growth in India as all the growth is happening in the big car segments.
Vehicle Tax rate
Currently, automobiles are being charged from one- to 22-percent supplementary tax in addition to the 28-percent Goods and Services Tax (GST). Completely constructed units (CBUs) of imported cars are liable for customs duties ranging from 60% to 100%. For the EV segment, the tax rate percentage is kept at 5% for both the Big and Small EVs. Bhargava also showed his disliking of the heavy taxes that are being imposed on the auto sector. He stated that this is affecting the industry’s growth.
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