The Automobile industry body, The Society of Automobile Manufacturers or SIAM as it is more popularly known, has called for the government to simplify the tax structure for passenger cars. Currently the tax structure for all passenger cars is split into four slabs, 12.5 per cent for small cars, 24 per cent for vehicles more than 4 metres in length but under 1,500cc, 27 per cent for passenger vehicles for vehicles over 4 metres and more than 1,500cc and finally 30 per cent for vehicles that have a ground clearance of more than 170mm.
SIAM however an amendment in the current regulations and has suggested a more simplified tax structure with just two slabs. As per the recommendation, SIAM wants to merge the 24 per cent, 27 per cent and the 30 per cent tax slabs. Keeping in mind the current scenario, SIAM has also suggested the excise duty for this slab be 20 per cent.
With vehicular pollution being the hot topic of discussion these days, SIAM also spoke about special incentives for those who want to scrap their old cars. Old and ill maintained vehicles pollute the environment a lot more than modern cars. But purchasing a car is still considered a big investment in India. Keeping that in mind, people will be more willing to do away with their older cars if given the bait of incentives as opposed to making it mandatory.
"We urge the government to provide a monetary incentive to those who intend to scrap their old vehicles and buy a new vehicle. This would help the cleansing process. It would help reduce the pollution as old vehicles with lower emission standards would be removed from the roads," SIAM said.
The Union Budget for 2016 will be presented by the government on February 29. Stay tuned to get more updates on how it will affect the automotive scene in India.
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