Budget 2019 Expectations Highlights: Automobile retail industry seeks recognition as MSMEs

In the Union Budget 2019-20, which will be presented on July 5, India`s automobile retail industry has sought recognition as micro, small and medium enterprises (MSMEs). Submitting its budget recommendations to the government, the Federation of Automobile Dealers` Association (FADA) has said that dealers, workshops and service stations must be covered under the ambit of MSMED Act 2006, as the subsidies and incentives received under this act will provide much needed relief to them. Key highlights of the association's budget recommendations are: 

1. The association said the move will help the sector which provides 25 lakh direct jobs to get access to loans at lower interest rates and also reduce tax burden.

2. FADA President Ashish Harsharaj Kale is quoted as saying, "Our main request, amongst others, is to be considered under MSME on an immediate basis and consider industry status in the near or mid-term to our sector. Today only the auto workshops have been kept out of the MSME category, despite qualifying and following all regulations required as an MSME under all parameters." 

3. The FADA president said, "The auto retail sector, despite its huge contributions does not avail of any incentive or support under any category currently," adding that GST rates should be reduced to five per cent on margins of all pre-owned vehicles.

4. According to the association, the country`s automobile sector is facing severe stress, therefore requested the government to resolve this by reducing overall GST or the cess charged on automobiles.

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5. FADA president added: "We believe by doing so it will create a positive consumer sentiment and better affordability in automobiles, which have seen unprecedented price hikes currently and will do so in the future too, due to stricter, but much required regulatory norms."