Ever wondered: How much do governments and companies make on the sale of a car or motorcycle?
Have you ever thought about how much the company benefits from the sale of a vehicle? Or how much profit the government makes from the tax on the sale of a vehicle?
Didn’t think So, today we are going to answer both these questions. In fact, to prevent the spread of corona virus, a central government lockdown was imposed across the country.
Although this lockdown was very important to save the lives of the people, but it did a lot of damage to the Indian economy.
Almost every sector suffered losses due to the lockdown, but automobile was one of the sectors that suffered the most.
Actually, all the factories, showrooms, dealerships were closed due to the lockdown which affected the sale from production to production.
In such a situation, companies are demanding the government to reduce the tax rate and the reason behind it is their earnings.
How much does the company gain on the sale of a vehicle?
According to Rajan Vadhera, president of the Society of Indian Automobile Manufacturers (SIAM-SIAM), companies make between 3 and 9 percent profit on vehicles.
He said that companies earn up to 3% on the sale of commercial vehicles. At the same time, manufacturers of companies gain up to 5-6 percent on the sale of passenger vehicles.
According to Rajan Vadhera, companies have the highest margin on the sale of two-wheelers. Manufacturers get a margin of up to 9 per cent on the sale of two-wheelers.
How much does the government benefit on the sale of vehicles?
SIAM President Rajan Vadhera said that GST taxes are being imposed on the auto industry from 28 to 60 per cent on behalf of the government.
That is, different GST rates have been imposed by the government on the category of different vehicles. In such a situation, the government is making a profit of up to 60 percent on the sale of vehicles.
Auto industry suffers lockdown
The auto industry has suffered a lot due to Corona’s hit. SIAM says that it will take three to four years for the market to reach a situation like FY 2018-19.
According to the industry, the category of all vehicles is seeing a decline of 26 to 45 percent, which has made it very difficult to recover.
Sales increased compared to May
The auto sector may have suffered losses, but the news of relief is that sales increased significantly in June compared to May. Including orders and inquiries, 85 percent of the situation has become similar to Corona.