Expect zero percent GST on sale of old commercial vehicles: Nitin Gadkari

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India's commercial vehicle industry can get tax relief if the Central Government has received a green signal under the Scrappation policy on the sale of old goods vehicles to Zuzru Goods and Services Tax (GST).

Union Road Transport and Highways Minister Nitin Gadkari said in a communication that the Ministry of Roads is pitching for zero percent GST for vehicles sold under Voluntary Vehicles Modernization Program (VVMP) or Vehicle Scrappation Policy.
"As far as the policy is concerned, after getting clearance from the cabinet, I can tell you about it. But the policy, now, is that we are expecting zero GST on vehicles that are crashing," he said.

According to the vehicle's scrappage policy, the center is scheduled to phase at least a decade old commercial vehicles and the current India does not comply with the stage emission norms. This road is expected to move more than 28 million vehicles.

The policy introduced in 2016 proposes to provide financial benefits for the sale of medium and heavy commercial vehicles (MHCV). Benefits include reducing the cost of acquiring new vehicles, providing tax benefits, promoting fuel efficient traffic, and controlling the break-down components of vehicles.
Currently, 18 percent GST is imposed on the goods sold as scraps. Under the Reverse Charge Mechanism, the buyer of such vehicles has to pay taxes on the amount received from such transaction. Building old commercial vehicle tax exemption will actually keep the prices of new vehicles.

"On the sale of commonly used vehicles, GST is paid on the value adjustment, in which no value of the GST is calculated in the context of the value where value is negative. Therefore, any reduction in the GST rate will be beneficial, however, the value will remain limited because The tax is on the only value addition, "said R Muralidharan, Senior Director of Deloitte India.

Gadkari has earlier said that the government will start the scrappage scheme of the vehicle only after getting GST Council approval.

Besides zero percent GST, Gadkari also said that if he provides "proof" of the vehicle to be sold, then MHCV buyers will be given more flexibility on the prices.

"A new vehicle buyer will be given a concessions at a new price or after he has submitted the certified certificate that he has predicted his previous vehicles. This relief will be provided by the manufacturer," the union minister said.

Earlier it was found that the Road Ministry is considering India-Stage compliance as a measure to break old vehicles.

According to the proposal, the government is the first vehicles that non-BS compliance vehicles that run on BS-E fuel, followed by vehicles on BS-2 fuel and then thereafter.