Skip to main content

GST Comes in Way of Govt's Plan to Scrap Old Vehicles

By
VOLUNTARY VEHICLE FLEET MODERNISATION PROGRAMME UNDER REVIEW
The government's ambitious programme to get old, polluting vehicles off the road has hit an unexpected speed bump: Goods and Services Tax.
The Voluntary Vehicle Fleet Modernisation Programme (V-VMP) is back on the drawing board as the government reviews its options to reward those who agree to junk their old vehicles to buy new, lesspolluting, ones.
The earlier plan was to levy lower excise tax on new vehicles bought under V-VMP . But the new tax system that is expected take effect next fiscal year will amalgamate excise tax into the overarching indirect tax called GST. The finance ministry doesn't favour giving incentives under GST and has directed the roads transport ministry to examine other methods to encourage people to scrap old vehicles.
“I had recently met the finance minister (Arun Jaitley) to discuss the proposed policy . He is in favour of providing financial benefits to people for scrapping vehicles,“ said Road Transport & Highways Minister Nitin Gadkari. “(But) the minister is not in favour of excise duty exemption in the wake of the upcoming GST law, as the GST council will have to clear it. He is of the view that we could give financial incentives under some special scheme. We are reworking the proposal as per the FM's suggestions and will then give it to the CoS (Committee of Secretaries).“
The roads ministry is working on a new proposal, which will shortly be put up before the committee comprising secretaries of the roads, steel, finance, heavy industries and environment ministries, a senior official in the roads ministry said. The draft policy currently proposes slashing excise duty by half on the purchase of a new vehicle after scrapping an old one, fair value for the scrap and special discounts from automobile manufacturers.The incentives are expected to reduce the cost of a new vehicle for the buyer by 8-12%. Further, to encourage commuters to shift to new and high capacity buses, which will help decongest roads, the policy also recommends complete excise exemption for state transport buses.
“The principles remain the same.We will incentivise the scheme for the initial 2-3 years, particularly to get off roads old polluting trucks and buses,“ said the official, who spoke on condition of anonymity .
The finance ministry has also suggested that the vehicle modernisation programme be made mandatory instead of keeping it voluntary for all heavy vehicles which are more than 15 years old.
As per the current voluntary vehicle modernisation scheme, vehicles bought prior to March 31, 2005, or those below BS IV emission standards, would be eligible for incentives if those were scrapped and replaced by new ones. According to government estimates, the V-VMP programme may take 28 million polluting vehicles off the road. It would enable generation of Rs.11,500 crore worth of steel scrap every year.
The Economic Times New Delhi,19th September 2016

Comments

Post a Comment

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

By
  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6
Post a Comment
Read more

Jaitley plans to cut MSME tax rate to 25%

By
Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem
1 comment
Read more

Don't forget to verify your income tax return in August: Here's the process

By
  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s
Post a Comment
Read more