Industry Voices Demand Clearer GST Framework to Drive Auto Sector Growth

With the Group of Ministers (GoM) recently approving a shift towards a two-tier GST structure, the Goods and Services Tax (GST) framework for automobiles came under sharp focus at the Society of Indian Automobile Manufacturers’ (SIAM) second Automotive Taxation Conference, where industry leaders and policymakers deliberated on reforms to streamline compliance and support sectoral growth.

Senior officials from the Ministry of Finance signalled that the government is actively working on rate rationalisation and process simplification. 

Shashank Priya, Special Secretary and Member (GST, CX & ST), CBIC stated that the measures under consideration include faster refunds for inverted duty structures, enhanced auto-filled data, and a defined timeline for reconciliation of credit notes. He noted that such steps would help reduce disputes and improve consumer sentiment.

Other officials, including Vivek Ranjan, Member (Tax Policy & Legal), CBIC; Bhaskar Goswami, Joint Secretary, CBDT; and Nisha Gupta, Senior VP, GSTN, outlined ongoing efforts aimed at easing compliance, particularly through technology-driven solutions.

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Industry leaders acknowledged that GST has already reshaped the tax landscape for the sector but stressed the need for further reforms. 

Arnab Roy, CFO of Maruti Suzuki India, maintained that the tax has been a “game changer” in terms of compliance and efficiency, but emphasised the importance of stability and predictability in tax policy to encourage long-term investment and research.

Vivek Anand, CFO of Hero MotoCorp, noted that while India has implemented significant direct and indirect tax reforms in recent years, the next phase must focus on rationalising GST slabs and addressing input credit challenges to reduce uncertainty for businesses.

Legal experts also highlighted the sector’s economic importance. V. Lakshmikumaran, Founder of Lakshmikumaran & Sridharan Attorneys, saidm “The automobile industry is not only central to mobility but also one of the country’s largest employment generators, directly and indirectly supporting millions of livelihoods.

The conference concluded with SIAM’s taxation policy leaders from Tata Motors, Mahindra & Mahindra, and BMW India underscoring opportunities to simplify tax procedures. They argued that a more predictable and transparent tax regime could provide the stability needed for innovation, investment and India’s broader energy transition.