The partial relaxation on road tax in Goa is bearing fruits. The retail sales have been increased by 41 per cent in four-wheelers while the two-wheelers sales have gone up by 14 per cent as compared to last year.
The Goods and Services Tax (GST) also gone up by 37 per cent for four-wheelers and 18 per cent to two-wheelers as compared to last year.
The data was shared by the Goa Automobile Dealers’ Association (GADA) which claims that the data is a conservative one as it has only been collected from about 20 dealers in Goa.
Chief Minister, Pramod Sawant had announced on October 9, 2019, that his cabinet has approved a 50 per cent road tax cut on purchase of new four-wheeler and two-wheeler vehicles.
A minimum of 30-35 per cent drop in the sales has been witnessed by many of the dealers in the month of September and some of them had even shut their shops in Goa leading to joblessness.
Various offers and incentives floated by the dealers by cutting their own profit margin had also not paid dividends. Many buyers played the role of wait and watch.
As per State Transport Department data, the overall registration of vehicles in Goa during the first four months of the current financial year was declined by 15-17 per cent.
A total of 19,480 vehicles were registered from April to July 2019. “With festivals approaching, this decision of the government will help the auto industry,” said Transport Minister Mauvin Godinho in October. And it did.
During the period from October 16, 2019, to November 15, 2019 – 2,352 four-wheelers and 2,650 two-wheelers were rolled out and from November 16, 2019, to December 15, 2019 – 2,253 four-wheelers and 2,019 two-wheelers were sold, sending a big sense of relief for the auto dealers in Goa. (Chart)
Prashant Joshi, president of GADA said that the above-mentioned data is been collected from 12 four-wheeler dealers and eight two-wheeler dealers in Goa.
“The government has got much more GST than their expectation. December is yet to end and the deadline is till December 31. Of course, the unit sales in the period of November-December is showing slightly lesser than that of October-November which is only due to lack of stock. All the fresh orders will be retailed before December 31 and then you will get to see the real picture,” said Joshi.
Before the 50 per cent road tax reduction, two-wheelers were costing up to Rs 1.5 lakh which were taxed at 9 per cent of the vehicle cost, while those between Rs 1.5 lakh to Rs 3 lakh were taxed at 12 per cent.
The vehicles costing more than Rs 3 lakh attracted a 15 per cent tax, as per the data. The tax on the four-wheelers costing up to Rs six lakh was at 9 per cent while the same was 11 per cent for the vehicles costing up to Rs 10 lakh.
And the vehicles priced between Rs 10 lakh-Rs 15 lakh brackets were charged with 11 per cent tax of the cost and those above Rs 15 lakh were placed at 13 per cent.
Manoj Caculo, president of Goa Chambers of Commerce and Industry (GCCI) and member of GADA believes that overall the auto industry in the country is facing a downward trend and that the same thing was affecting Goa. “However the rebate which was announced by the Goa government on road tax is now benefitting the consumers and retailers directly. It has also helped us to survive in these ongoing bad phase. If the scheme wasn’t implemented then the sales would have been minuscule,” said Caculo.
Caculo went on to add that, “The State government has got huge revenue which they were not getting in any case. In terms of percentage, they might have got it less but if the sales would not have happened, and then the GST collection would have been much lower. The rest of the country is suffering from it. In fact, the manufacturers are giving Goa market first priority as they know that they can maximise their sales only till December 31. This is helping the State to get its liquidity.
“In fact, as dealers, unless we retail the vehicles, the State share of the GST will not come to Goa. The jobs in this industry in Goa have been saved and there is a hugely positive ripple effect in the State due to the reduction in road tax which is going to help the economy of Goa immediately.”
Vallabh Kuncoliencar, secretary of GADA and managing director of Goa Rajee Auto Pvt Ltd and Goa’s leading two-wheeler dealer said, “With the reduction in road tax most of the dealers have got into a position to liquidate their stocks and reduce inventories. We have given a representation to the State government to extend this rebate till March 31 which will help not only the auto sector in Goa but also in garnering more GST.
“Most importantly we are asking this rebate as we need to shift from BS-IV type models to BS-VI by April 1, 2020. If this rebate continues the dealers will be soon in a position to clear their inventories and customers will also get some concession.”
The auto industry in Goa prior to October this year had gone down by at least 40 per cent. The dealers requested before the Goa Government to help them which the State government did by announcing the road tax relaxation till December 31 of 2019. The auto industry is also facing another challenge of rolling out vehicle with BS-VI engines on April 1, 2020, and without any doubt, the cost of all vehicles are likely to go up. Also, the dealers will have to clear their inventory on or before March 31, 2020.
