Automobile dealers' body Federation of Automobile Dealers Association (FADA) has highlighted a few issues to Union Finance Minister ahead of the Union Budget 2022. FADA requests the Finance Ministry to allow individuals to account for depreciation. This will not only help in increasing the number of individuals filing their IT return but will also help in igniting automobile demand (especially Two-Wheeler) from individuals and will thus up the GST collection for the government. The Vehicles depreciates for Corporate as well as Individuals and it would hence be judicial that the Salaried Class should also get the same benefit. FADA noted that two-wheelers are not a luxury item and hence GST rates need to come down. FADA requests the Ministry of Finance to regulate and reduce GST rates on two-wheelers to 18 per cent and continue to move our nation to global leadership. At a time when vehicle prices are increasing after a gap of 3-4 months due to rise in input costs and various other factors, a reduction in the GST rate will counter the price hike and help spur demand.

FADA has asked for uniform GST rate of 5 per cent on the margin for all used vehicles. With the reduction in GST, it will help the industry to shift from unorganised segment to organised segment thus bringing in more business under the ambit of GST helping in putting brake on tax leakages.

The industry body noted that the government has reduced corporate tax to 25 per cent for private limited companies with turnover of up to Rs 400 crore. The same benefit should also be extended to all LLP, Proprietary and Partnership firms as most traders within the auto dealership community fall in this category.