The auto industry is also scrapping duty on import of lithium-ion battery cells so that battery packs can be manufactured locally.
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In the middle of a prolonged slowdown, the automobile industry has asked the government to take bold fiscal measures to revive the sector that has reported its worst-ever sales-decline in two decades during 2019, industry sources said. In the upcoming Union Budget, the auto industry has sought measures, such as a reduction in GST rates on vehicles and abolition of duty on import of lithium-ion battery cells, to encourage electric mobility.
The industry, which has been facing a downturn for almost a year now, has also sought an incentive-based scrappage policy and an increase in re-registration charges of vehicles to discourage the use of old vehicles. Sources said that the introduction of BS-VI emission norms is a positive step to reduce emissions significantly but the initiative would lead to an 8-10 per cent increase in vehicle cost, leading to enhanced GST collections for government.