Auto component industry unhappy with proposed increase in tax on vehicles

Ludhiana, Feb 29 (KNN) President, Auto Parts Manufacturers Association, Gurupraghat Singh is of the opinion that the increase in tax proposed by the Finance Minister, Arun Jaitley will have a negative impact on the industry, leading to huge losses.

“Tax should not have been increased.  Rather, if the taxes are reduced, more and more people will be encouraged to pay tax, leading to higher tax collection by the government,” Singh told KNN.

“I also propose to collect tax at source at the rate of 1 per cent on purchase of luxury cars exceeding value of Rs.10 lakh and purchase of goods and services in cash exceeding Rs. 2 lakh. For compliant tax payers with resources, this levy not only advances collection of tax when the expenditure is incurred, but it provides data to the tax authorities to identify the persons who incur such expenditure, but may be missing from the tax base. Farmers and notified class of persons will have an option of giving a form by which TCS will not be charged,” the FM said in his Budget Speech in Parliament today.

He also said that the pollution and traffic situation in Indian cities is a matter of concern.

In view of that, “I propose to levy an infrastructure cess, of 1 per cent on small petrol, LPG, CNG cars, 2.5 per cent on diesel cars of certain capacity and 4 per cent on other higher engine capacity vehicles and SUVs,” he added.  (KNN Bureau)