As the Indian Auto industry is going through one of the longest sales slowdowns, the auto industry has sought a reduction of GST on all vehicles to 18% from the current rate of 28%. Bringing down the tax rate will reduce vehicle prices which will help in spurring demand that has been sluggish for the last 11 months. This however, will need approval of the GST council. With an aim to support local manufacturing, a customs duty on fully imported commercial vehicles (CV) may be increased to 40% from 25%.
Also, an incentive-based vehicle scrappage scheme can be announced to get polluting, unsafe and old vehicles off the road. Furthermore, budget allocation for electric vehicle promotion having a timeline for implementation is quite sought for. Companies which manufacture electric vehicles such as TATA Motors and Mahindra & Mahindra can be the major beneficiaries and investment for road infrastructure will boost commercial vehicle sales and is expected to benefit companies like Ashok Leyland, TATA Motors, Mahindra & Mahindra and Eicher Motors.