Automobile dealers in Goa calls for tax cut
Automobile dealers in Goa calls for tax cut:- The automobile dealers in Goa are menacing to retrench its staff unless the government justifies the tax structure on their industry. The unreasonable increase in the road and infrastructure tax is altogether having a negative impact on sales and economizing is the only option left to cope-up with the slowdown in business, claimed all auto dealers on Friday.
Pressurizing the government to lower the tax rates, they said that dismal in jobs is likely to take place from December 2016. It will be in the range of around 30 per cent of the 6,500 working force which means at least 1,950 people will be jobless in the near future.
The automobile dealers jointly expressed their disappointment to the increase in the road tax and other tariffs that came into force from September 21. They said that a few dealerships are currently in losses due to the slow business while the entire automobile industry is in danger of slipping into inflation if the market’s sentiments turn adverse due to high taxes.
Car’s prices have increased of around Rs 6,000 to Rs 4 lakh, post increase in the road taxes. “All consumers are resisting the increased price and are so are purchasing cars from the neighboring states. Recently many dealers had to keep their bookings on hold and were also impelled to refund the booking amount,” stated the Goa Automobile Dealers Association (GADA).
Prashant Joshi, president, GADA, said that Goa’s automobile sales saw a significant bounce back in August 2016, where dealers reported at least 30 per cent of increase in the sale of cars and about 60 per cent increase for two-wheelers.
However, after that the tariff hike sales hit the road and are significantly slowing down the sales. The industry has failed to convince the government to lower the tax rates despite several representations before and after budget, added Joshi.
Manoj Caculo, the former president of GADA, also mentioned that between 2012 and 2016 the road tax has increased from mere 6 per cent to 21 per cent. And on the top of that the industry also had to contend with increase in the minimum wages and VAT. “If the government does not act fast the local dealers will be out of their businesses,” pointed out Caculo.
GADA members, Vallabh Kuncoliencar, honorary secretary, Akash Khaunte, Rajesh Kaunte, present during the press conference said that the government is equalising them with the automobile manufacturers and imposing high taxes. In actuality the dealership business is very much capital intensive and not that profitable, they added.
Contribution and Suggestion
All automobile dealers contribute Rs 800 crore approximately to the government in the form of taxes. The industry is completely compliant with taxes, according to the association.
Dealers suggested a road tax of maximum 15 per cent to the government. Mostly states have a road tax rate of about 10 per cent, according to the automobile dealers.