Business

FADA urges FM Sitharaman to introduce depreciation benefits against income

Express News Service

NEW DELHI:  The Federation of Automobile Dealers Associations (FADA) has suggested that the government introduce benefits of claiming depreciation on vehicles for individuals paying Income Tax and extend the depreciation period for corporates in the upcoming budget. The auto dealers’ body has also sought introduction of incentives for implementation of Vehicle Scrappage Policy across the country.

“Depreciation claims will boost vehicle demand during these extraordinary times, increase the number of individuals filing IT returns and also promote growth in GST collection for the government. The increase in depreciation rate for all types of vehicles which was valid till March 31, 2020 should also be extended for FY21 as it will fuel demand further,” the association said. 

On the much-delayed Scrappage Policy, FADA said that the government must design a robust Inspection & Certification (I & C) policy or End of Life  Vehicles (ELV) policy for vehicles in the country. “However, as both the above policies would take time to be effectively implemented, there is a need for a scheme based on incentive for encouraging voluntary scrapping of old vehicles and replacing them with newer ones. The new vehicles are cleaner and meet stringent emission requirements,” it added.

The policy implementation, according to Fada, should be focused on incentives rather than strict mandates. All vehicles registered in India until 31st March 2000 should qualify under the Modern Fleet Vehicle Replacement Scheme. “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, one of the key pillars of  India’s growth trajectory, contributes about 4.5 million jobs. We look forward to a demand-led growth oriented budget,” FADA President Vinkesh  Gulati said in a statement.

Exemption from paying TCS

FADA had also said auto dealers should be kept out of annual TCS (tax collected at source) of 0.1 per cent saying it is a huge financial burden on the overall automobile retail industry.

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