PANAJI
Auto dealers cried foul over State government’s decision to hike road tax stating that they will be forced to cut at least 2,000 jobs as a result of drastic decline in sales.
Auto dealers in the State, put together, employ around 6,000 workers. Dealers have expressed apprehension that the present hike in road tax may affect sales.
Prashant Joshi, president of Goa Automobile Dealers Association (GADA), termed the recent road-tax increase as “irrational”. Joshi said, “we met Chief Minister, Laxmikant Parsekar, and expressed our concern saying that road-tax should be increased in a rational way.”
But, the government has clearly ignored GADA’s concerns. Auto dealers informed that the road tax, which was as low as 6 per cent in 2012, has shot upto 21 per cent for the highest slab after the latest increase. If a company, with a share capital of more than ` 50 lakh, is buying a car priced at more than ` 25 lakh, then the road tax will see an increase from 14 per cent earlier to 21 per cent now.
With the latest increase in road tax, auto dealers said that price of cars has increased anywhere from ` 6,000 to ` 4 lakh. Dealers informed that customers have put 30-35 per cent of bookings on hold, which might even get cancelled.
Joshi continued, “All auto dealerships in the state, put together, employ 6,000 workers. If same situation persists, we might have to cut 1,900-2,000 jobs by December 2016.”
Joshi further informed that auto dealers contribute ` 800-1,000 crore to state exchequer every year through taxes. With the latest tax increase, the dealers are staring at decline in sales, which will badly affect government’s tax collections as well.
Automobile industry is already in bad shape, as Manoj Caculo, former president of GADA, said, “Seven dealerships have closed down in Goa in the last two years as it is becoming very difficult to make money in this business.”
Caculo continued, “There are 15 States in India, where road tax is less than 10 per cent. But, in Goa, road tax for highest slab is 21 per cent now.”
Joshi said that the mood in auto industry had just become positive after a long time since mining was banned in 2012. He said, “The mood in automotive sector was turning positive, which was reflected in August 2016 numbers. Normally, all dealers in Goa sell an average 1,500 cars and 3,800 two-wheelers in a month. But, in August 2016, we sold 2,500 cars and 5,500 two-wheelers.”
Just when the market showed signs of improvement, government increased taxes making it extremely tough for dealers to make a profit, which will push them to cut jobs.
