Auto Stocks Rise Upto 5% On Tax Cut Hopes
Auto stocks rose up to 5 per cent after Finance Minister Nirmala Sitharaman hinted on Tuesday that GST Council would look into the auto industry's demand for lowering the tax rates on two-wheelers, which are currently taxed at the highest slab of 28 per cent. At 11:00 am, the NSE Auto index - comprising shares in 15 manufacturers of automobiles and auto ancillaries - gained 1.4 per cent to 8,095.35, with TVS Motor, Hero Motocorp, Tata Motors, Bajaj Auto and M&M adding 1.7 per cent to 4.3 per cent each on the NSE.
Speaking to industry executives at a virtual briefing, Ms Nirmala Sitharaman said lowering taxes on some types of vehicles was a "good suggestion". The finance minister said two-wheelers merited a rate revision, in response to a question about cutting goods and services tax rates on those vehicles, the Confederation of Indian Industry said on Tuesday.
Total passenger vehicle sales declined 3.86 per cent to 1,82,779 units in July 2020, compared to 1,90,115 units in July 2019, data released by industry body Society of Indian Automobile Manufacturers (SIAM) showed.
Just to put things in perspective, Maruti Suzuki India, Hyundai Motor India, Mahindra & Mahindra (M&M), Toyota Kirloskar Motor (TKM) and MG Motor India had reported zero sales for the month of April as they had suspended operations even before the imposition of lockdown on March 25 to check the spread of coronavirus.
The benchmark indices were virtually unchanged at the time; the BSE Sensex was at 38,855.52, higher by 6 points and the NSE Nifty was at 11485.75, up 13.75 points.
