Auto makers cry babies, no need for GST cut: Srini
Chennai: N Srinivasan, MD of the India Cements on Thursday joined Rajiv Bajaj, MD of Bajaj Auto, saying there was no necessity for any GST cuts on automobiles as the current crisis was a result of bad planning by automakers.
The GST council is meeting on September 20 and most players in the automobile industry have been lobbying for an immediate reduction in GST levied on vehicles to 18% from the current 28% to boost demand.
“A duty cut will not spur demand. The issue is more structural. Look at us (cement trade). We have been eking out a living in South India by running our plants once every two days for nearly four years now. Cement is taxed 28%. We have learnt to live with this and work around these levies. We never asked for cuts. On the contrary, auto makers are asking for cuts with just a few months of slump,” Srinivasan said. Auto makers should have introduced cheaper products and kept the market buzzing with interest rather than be cry babies and run and seek cuts, he said. “The slump was seen coming, yet the automakers continued to pile up inventory.”
The government should also factor in the balance sheets and cash balances of automakers. “Take Maruti, their quarterly net profit even now is more than Rs1,400 crore and they are sitting on piles of cash,” Srinivasan said. “Why should it happen?”