Scrappage Policy Along with GST Depletion Can Bring Back Commercial Vehicle Industry to Life: Ashok Leyland

The introduction of Scrappage Policy and Reduction in GST rate would help in reviving the commercial vehicle sector which has been facing headwinds for quite some time now, says, a top Ashok Leyland official. The Hinduja Group flagship company also expects the situation due to the current downturn in the industry, most recently due to the outbreak of the Novel Coronavirus (COVID-19), which is having a major impact on all the aspects of society including the automotive industry, to improve gradually during the current fiscal.

Ashok Leyland MD and CEO Vipin Sondhi said “The answer is yes, it certainly will,” when asked if the GST rate cut on the commercial vehicles would help in reviving the sector.

Moreover, to have it at 28 per cent (GST rate) is something which the industry has put forth to the government in the past now as well. Therefore,” When you look at the commercial vehicle industry, it is core to the country, it is pretty much the core industry. Hence, this GST rate could be one of the possible demand triggers and the other trigger points could be introduction of a scrappage policy, Sondhi noted.

CEO Vipin Sondhi said the situation will depend on various factors like availability of liquidity at the right time and the impact of reforms initiated by the government. He added, “I think every quarter will be better than the previous one and we will have to be ready.

However, the government has said it is working on a scrappage policy, but has so far not indicated if it would also look at lowering the GST rates on automobiles.

Lastly, the Auto industry body SIAM has been pleading the government to reduce the GST rate on vehicles from 28 to 18 per cent and to introduce an incentive-based scrappage policy.