Import duty has been reduced on many types of steel. It has been reduced from 12.5 percent to 7.5 percent. This will provide relief to companies making vehicles.
Finance Minister Nirmala Sitharaman may not have announced any relief directly for the auto industry in her latest budget. But, indirectly, many such steps have been taken which will affect their prices with car buyers. Vehicle scrap policy is one of them. Come, let us know here how it will affect you.
Scrapage policy is to remove old cars The
central government is going to bring a voluntary scrap scheme to remove old vehicles from the roads. The Ministry of Road Transport will share more information about this scheme in the next fortnight. More than 20 years old personal vehicles and commercial vehicles more than 15 years old will be targeted in the scheme. The Finance Ministry has not said whether its owners will get any incentive to remove the old vehicles.
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However, last week the Ministry of Road Transport proposed green tax. This will discourage old polluting vehicles. In case of personal vehicles more than 15 years old, up to 10-15% of the road tax will be charged at the time of renewal of the registration certificate. Vehicles will have to undergo an automated fitness test. Registration of vehicles failing in this test will not be renewed.
Mahindra & Mahindra MD Pawan Goenka said, “I think there should be incentive for scraping of vehicles. If this is not done then the scheme will not catch pace. I think the government would have understood it. ”
Prices of vehicles may not increase due to decreasing steel prices
Import duty has been reduced on many types of steel. It has been reduced from 12.5 percent to 7.5 percent. This will provide relief to companies making vehicles. This may prevent him from another hike in the price of vehicles. In the beginning of this year, all the automobile manufacturers had increased the prices. Considering the increasing input cost, she was thinking again about it. Steel prices are close to their all-time highs. In 2020, it has increased by 60 percent from its low level.
But luxury car prices may increase
The Finance Minister has increased import duty on many auto parts in Budget 2021. These include electricals, tuff glasses and engine components, etc. The government has taken this step to help the domestic industry. However, this may increase the prices of luxury cars by up to Rs 1.5 lakh in the short term. The reason for this is that companies making expensive cars get many such components from outside. This will have less impact on domestic economical models.
Second-hand car prices will be affected
The proposal of green tax may affect the prices of second-hand cars. This green tax will have to be given to the second hand car / vehicle buyer when it is 15 years old. Rigid system of fitness certificate can also reduce the life of the car. This will affect the resale value even more.
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