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GST Effect: Transport Buses To Be Pricier
The new Goods and Service Tax (GST) policy will increase the price of the transport vehicles.
The Government of India will implement the Goods and Service Tax (GST) from July 1, 2017. The new taxation policy will increase the price of the transport buses.
The Indian government has decided to levy a cess 15 percent, over the current GST rate of 28 percent on transport buses. Now, the public transport vehicles come under the same tax slab as the hybrid vehicles and luxury cars.
As per the latest notification from the Finance Ministry, motor vehicles transporting ten or more persons including the driver will attract a cess of 15 percent. The total tax rate stands at 43 percent.
Currently, the tax rate on transport buses stands at 27.8 percent. Society of Indian Automobile Manufacturers (SIAM) stated that the GST tax rate would hamper the public transport.
SIAM Director General Vishnu Mathur said, "Government has been speaking about expanding public transport in the country to reduce air pollution. So by increasing tax on buses it is going against its own stated position."
A spokesperson from Ashok Leyland said, "A clarity has been sought on the subject which is brand agonistic.. If this is true, the increase in the cost will impact all operators and the end users at large."
Earlier, the GST council raised the tax rates of hybrid vehicles to 43 percent. Now the same treatment has been given to the public transport sector. Several automakers had urged to bring down the tax to 18 percent, but there are no changes made.
DriveSpark Thinks!
The government is encouraging the use of public transport to reduce the emission levels. But the GST tax slab is heading in the opposite direction.
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