New Delhi: India’s automobile retail industry has sought recognition as micro, small and medium enterprises (MSMEs) in the Union Budget 2019 which will be presented in a couple of days, on Friday, July 5. Also Read - Loan Moratorium: Supreme Court to Pronounce Verdict Today on Pleas From Trade Associations
According to the budget recommendations made to the government by the Federation of Automobile Dealers’ Association (FADA), dealers, workshops and service stations seek coverage under the MSMED Act 2006, as subsidies and incentives under this Act will provide relief to them. Also Read - Top 5 Government Business Loan Schemes in India 2021 | Watch Video
The association said the move will help the sector, which provides 25 lakh direct jobs, to get access to loans at lower interest rates and also reduce their tax burden. Also Read - Need Coordinated Action Between Centre, States on Tax Reduction in Fuel Prices: RBI Governor
“Our main request is to be considered under MSME on an immediate basis and consider industry status in the near or mid-term to our sector. Today only the auto workshops have been kept out of the MSME category, despite qualifying and following all regulations required as an MSME under all parameters,” FADA President Ashish Harsharaj Kale said.
“The auto retail sector, despite its huge contributions does not avail of any incentive or support under any category currently.” Besides, FADA demanded that GST rates should be reduced to five per cent on margins of all pre-owned vehicles.
Additionally, the association said that the country’s automobile sector faced severe stress and requested the government to resolve this by reducing overall GST or the cess charged on automobiles.
“We believe by doing so it will create a positive consumer sentiment and better affordability in automobiles, which have seen unprecedented price hikes currently and will do so in the future too, due to stricter, but much required regulatory norms,” Kale said.