FADA has recommended a few new policies to the Finance Minister of India. Given below are the four new policies recommended by the Federation of Automobile Dealer Association.
Before the announcement of budget for the upcoming financial year, Federation of Automobile Dealers Association (FADA) has recently issued a pre-budget recommendation. Making recommendations to the Finance Ministry, Mr Vinkesh Gulati, President Federation of Automobile Dealers Associations (FADA), has said –
“Honorable Finance Minister Smt. Nirmala Sitharaman has already expressed her intention to revive growth and boost investor confidence. The upcoming 2021 Union Budget should be focused on measures to revive the Indian economy from the pandemic slowdown and boost consumption-led demand. 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 ~4.5 million jobs. We look forward to a demand-led growth-oriented budget.”
Given below are the highlights of the recommendations made by FADA to the Finance Minister-
Benefits of Depreciation
FADA has recommended to claims depreciation on vehicles for individual owners paying tax. They have also suggested extending the depreciation period for the individuals. This decision will lead to an increase in demand for vehicles.
Lowering Corporate Tax for Proprietary and Partnership Firms
FADA has also recommended the reduction in corporate tax to 25 per cent for Pvt Ltd companies that have a yearly turnover of around Rs 400 crore. As per FADA, this benefit should be offered to all the Proprietary and Partnership companies as most of the traders belonging to the automobile dealership community fall into this segment.
The financial bill of the year 2020 was introduced with 0.1 per cent TCS and was charged yearly w.e.f October 1, 2020. This 0.1 per cent TCS was proved to be a big financial burden on the auto retail industry as it leads to the blocking of funds until the dealers get a refund.
Benefits on vehicle Scrappage Policy
FADA has also recommended implementing a strong Inspection and Certification (I&C) policy or End of Life Vehicle (ELV) policy for all the vehicles. These are a few policies recommended by FADA to the Finance Minister of India and these policies will a bit time to get implemented.