Union Minister Nitin Gadkari on Wednesday has said that it is up to Finance Ministry along with State Governments and GST Council to decide on reduction in GST rate for automobiles and that he has already spoken to Finance Minister in this regard.

Road Transport and Highways Minister also said a scrapp policy, which also includes two-wheelers, is in works and will be launched soon. Last week at SIAM annual convention, Gadkari assured auto industry that he would take up issue of GST reduction for automobiles to 18 per cent from 28 per cent.

FM can decide on GST reduction - Gadkari

"I have already discussed with Finance Minister. But ultimately if FM has to take any decision it must be with consultation with State Finance Ministers and GST Council," Gadkari said at launch of a BS-VI scooter by Honda Motorcycle and Scooter India. He furr said, "currently ball is in court of Finance Ministry and he is confident that Ministry in consultation with State Governments will take a positive decision."

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Commenting on vehicle scrapp policy, Gadkari said a draft has already been prepared. "But re are still problems related with various stakeholders. We need cooperation from manufacturers as well as Finance Ministry," he added.

"Some of issues are related with tax while some are related with state governments," he added.

When asked how soon such a policy could become a reality, he said, "we are ready with process. My ministry is trying to get it cleared as early as possible and I am confident that in limited short time we would come to a conclusion and we will launch policy." He also said such a policy would also include old two-wheelers and "if two-wheeler industry wants to suggest anything we are going to listen to it with an open mind."

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He also addressed distressed situation in auto industry

Ackwledging current distress in auto industry, Minister said reasons could be myriad due to demand and supply issues, global ecomic slowdown, or due to business cycle. He, however, exuded confidence that within five to six years, India will become a global manufacturing hub for automobiles.

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growth of automobile industry is very important for India's overall ecomic growth and employment generation, he added. When asked for comments on various states, including BJP-ruled Gujarat, refusing to implement new motor vehicles law due to hefty penalties, Gadkari said since it was in concurrent list, states were free to take ir own decision.

He, however, said that intent of heavy fines was t to create additional revenue but to prevent accidents and save lives. Moreover, he said fines that were fixed 30 years ago would also need to be updated according to current situation.

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