Economic Times ( 19 Sept 2016 ) carries following
news report :
GST comes in way of government’s plan to scrap
old vehicles
" 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, less polluting, 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.
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. "
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Simply replacing OLD petrol / diesel vehicles with NEW petrol / diesel
vehicles is a half-way
house !
No one understands this better than our " Minister-in-a-Hurry " , Shri Gadkariji , who does
not believe in the theory of " Evolving through Incremental Improvements "
That is the reason he mandated the vehicle manufacturers to jump
straight from current BHARAT
4 emission norms to BHARAT
6 emission norms , ( bypassing BHARAT 5 norms ), by 2020 !
He knows how 800 million poor Indian Citizens who had never
owned a landline telephone , simply
bypassed it with a cheap mobile , to usher a Communication Revolution in India !
But even he cannot persuade the just constituted GST Council ( which will
hold its very first meeting today ) , to reduce GST rate for new vehicles .
That would open up a " Pandora's
Box "
But surely he can convince his Cabinet Colleagues ,
* The FUTILITY of just
replacing OLD with
the NEW ( petrol or
diesel )
* The DESIRABILITY to move
straight from OLD (
petrol / diesel ) to NEWER
( electric vehicles )
Here is how this can happen ( - and without having to reduce GST on the new electric
vehicles ! ) :
Abolish CORPORATE INCOME TAX for next 10 years for the following
manufacturers / service providers ,
# Manufacturers of
Electric Vehicles and Manufacturers of " Special Purpose Components "
thereof
#
Manufacturers of equipment needed for charging of electric vehicles
# Companies owning and operating Electric Charging
Stations
# Companies manufacturing
Solar Power Generation Equipment
# Electric Utility
Companies owning / operating Solar Power Generation Stations
( Surely , we don't want
to simply transfer the pollution from cars to fossil fuel power plants ! )
# Any other manufacturer
/ service provider who helps to accelerate this revolution
Now , with this " INCENTIVE " , imagine the kind of " FIERCE COMPETITION "
among the vehicle manufacturers to quickly switch-over from petrol / diesel to ELECTRIC VEHICLES , in
order to survive !
Expect a MAD
RACE to switch over - a race in
which selling prices of electric vehicles gets 10
% lesser than equivalent petrol / diesel version !
No need to " incentivize / reward
" the buyers with a reduced GST , for scrapping their old polluting vehicles !
Just harness the combined power of Corporate
GREED with INSTINCT FOR SURVIVAL
!
Entire World would want to copy the MIRACLE that gets unleashed in India
I hope Shri Gadkariji will give my suggestion , a serious
consideration
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22 Sept 2016
www.hemenparekh.in / blogs
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