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Shriram Pistons & Rings bats for GST rate cut on automobiles to revive sales

Updated : September 10, 2019 06:57 PM IST

Shriram Pistons & Rings on Tuesday batted for a Goods and Services Tax (GST) reduction on all vehicles to revive the sinking automobile market as sales continued to plummet with passenger vehicle makers witnessing a decline of 30 percent offtake in August.

In an interview to CNBC-TV18, Ashok Taneja, managing director and chief executive officer, said, "The aftermarket for the auto component is a very large portion of our total market. About 60 percent of components today are covered under 18 percent of GST and the balance 40 percent are still under 28 percent GST. A grey market has developed as the GST rates are very high. So, that's is the reason why we want the customers to get genuine parts. A request has been made to reduce the GST to 18 percent and make it uniform for all components."

"If the government reduces the GST, the price of the component in the aftermarket will reduce immediately. Therefore, the consumer will have access to genuine components and the tendency of some of the traders to deal with these components will be reduced," he said.

"As far as the vehicle is concerned, whether the component duty is at 28 or 18 percent, it is a simple pass-through as it will not impact the end price of a car if the duty of components was reduced to 18 percent. However, it will have a very significant impact on sales in the aftermarket and it will reduce the grey market. In fact, it will increase the revenues of the government and it will provide safer products to the consumers,” he added.
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