Ahead of Union Budget 2021, the FADA (Federation of Automobile Dealers Associations) on Wednesday has urged the Finance Minister to introduce benefits of claiming depreciation on vehicles for income taxpayers and extend the depreciation period for corporates. The Union Budget 2021 should be focused on reviving the Indian economy and accelerating the economic activities to increase the consumption-led demand.
Wants of FADA in Union Budget 2021 for Automobile Sector
The FADA has urged to keep auto dealers out of 0.1% annual TCS (Tax Collected at Source- introduced in the Finance Bill 2020 w.e.f from October 2020), as FADA consider 0.1% as a huge financial burden on the automobile sector.
“The Indian automobile industry is a barometer of the Indian economy and its revival will, in turn, pull up the economy. The auto retail industry is one of the key pillars of India’s growth trajectory, contributing around 4.5 million jobs. We look forward to a demand-led growth-oriented budget,” said FADA President Vinkesh Gulati.
Reduction of corporate tax for partnership and proprietary firms. FADA said, it will boost morale and sentiments of the automobile traders that together generate 5 million people and 2.5 million are on direct employment.
Corporate tax benefit of 25% for companies with turnover up to Rs. 400 introduced last year should also be extended to all the partnership and proprietary firms as many automobile dealers fall in this category.
The government must design an inspection and certification (I&C) policy or end life vehicles policy for encouraging voluntary scrapping of old vehicles and replacing old vehicles with new ones.
Vehicles registered in India under 31st March 2000 should qualify under the modern fleet vehicle replacement scheme. Similar schemes have been implemented in the US, Canada, UK, and Italy by providing incentives for vehicle replacement.