The entire automotive industry including all the players in the passenger car, commercial vehicle as well as two/three wheeler manufacturers have united to seek a reduction in the GST rate from 28% to 18% on vehicles. This was reinforced by Rajan Wadhera, President, SIAM, who cited media reports which suggested that that some auto industry leaders do not agree to the SIAM proposal for GST reduction on vehicles.

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The automotive industry is currently facing a daunting challenge of a deep slowdown that urgently needs some form of stimulus from the Government to supplement the efforts being made by the industry in reversing the industry fortunes towards positive performance. Domestic passenger car sales fell 26.03% to 1,47,546 units in May, data from industry body Society of Indian Automobile Manufacturers (SIAM) showed. Industry observers pointed out that a high base effect along with low demand and high interest costs continued to dent purchases. 



In addition to the reduced demand today, new safety and emission norms that would come into play in the next few months would further drive up the cost of vehicles, leading to further pressure on demand. A reduction in the GST rates would go a long way in maintaining the price competitiveness of the industry and boosting the consumer demand.


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