Automobile bodies urge Guv for tax review
Nishikant Khajuria
JAMMU, Sept 10: The severe hike in One Time Tax on all motor vehicles, applied by the State Government from August 1, 2019, has resulted in unprecedented immediate drop in sales of the vehicle in Jammu and Kashmir last month thus triggering a fear of closure of J&K based automobile dealerships and consequent job losses here.
Application of 9 percent One Time Tax following the Government notification number SRO 492, has increased the Token Tax on popular passenger vehicles from Rs 20 thousand to Rs 85 thousands and thereby made prospective customers in J&K to postpone any decision to buy a new vehicle thus resulting into immediate drop in sale of vehicles by about 90 percent, last month.
The data available with the Excelsior reveals that within Jammu, the total sale of two wheelers in the month of August registered 54 percent drop from the previous month while the sale of four wheelers dropped to around 80 percent in the corresponding period.
The situation has not only worried the local sellers but also alarmed the national level apex bodies of automobile manufacturers and dealers, who are learnt to have written to J&K Governor Satya Pal Malik for relooking at revising the One Time Tax on vehicles in the State.
In Jammu, only 858 four wheelers were sold in the month of August 2019 whereas the sale of units was 2797 in August 2018 and 2317 in July 2019. From July 2019 to August 2019, the sale of Maruti dropped from 1540 to 300 while Hyundai registered a drop from 421 to 270. Sale of Tata vehicles dropped from 122 to five only and M&M from 97 to 10. Both Toyota and Honda registered zero sales in the month of August 2019 whereas sale of their vehicles in July 2019 was 72 and 65, respectively.
Similarly, in the two-wheeler segment, Hero registered 25 percent drop in the sale while Honda sale was dropped to 83 percent. Bajaj sale dropped to 47 percent, Yamaya 66 percent, Suzuki 12 percent and Royal Enfield 71 percent.
Pertinent to mention that the SRO 392, dated August 1, 2019 was issued by the Principal Secretary Transport Department, Government of Jammu and Kashmir, according to which 9 percent One Time Tax has been applied on all the newly purchased motor vehicles in the State.
This severe hike in One Time Tax, which is multiple times more than the previous Token Tax, has resulted in immediate drop in sales of vehicles in J&K thus worrying the dealers and triggering a fear of job losses in the industry.
Alarmed over gravity of the situation, the Federation of Automobiles Dealers Association (FADA) and the Society of Indian Automobile Manufacturers, have separately written to J&K Governor Satya Pal Malik seeking his attention towards the negative consequences of increased One Time Tax.
“The severe hike on One Time Tax has postponed any decision to buy a new vehicle by the prospective consumers in Jammu and Kashmir thus resulting in immediate drop in sales of vehicles by about 90 percent in the month of August 2019 in the State,” reads the letters, forwarded by Ashish Harsharaj Kale, President FADA and Rajan Wadhera, President SIAM, to Governor J&K.
Reminding the Governor that the Union Finance Minister has recently announced to withhold any proposed increase in the Registration Fees of new vehicles across the country as the Indian automobile industry is already going through an unprecedented slowdown over the last one year resulting in job losses, FADA and SIAM have urged for relooking at revising the One Time Tax for vehicles in J&K.
FADA is the apex national body of automobile retail industry in India engaged in the sale, service and spares of 2/3 wheelers, Passenger cars, commercial vehicles (Including buses and trucks) and represents over 15000 automobile dealers having 25000 dealerships, including 30 Associations of automobile dealers at the regional, State and city levels accounting for 90 percent of market share in India.
Society of Indian Automobile Manufacturers (SIAM) represents all the leading vehicle manufacturers in India.
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