New Delhi: Faced with serious challenges amid the coronavirus crisis, the automobile gas industry is seeking urgent policy help from the government to be able to support itself post the lockdown.
According to the apex industry body Indian Auto LPG Coalition (IAC), sales volumes have been affected by more than 90 per cent due to the country-wide lockdown and the comprehensive traffic restrictions. The demand from three-wheeler segment which is among the largest consumers of auto LPG has been almost zero since public transport has been strictly off roads.
As per the body, even after the lockdown is lifted, it would take several months for public transportation to return to normalcy due to social distancing requirements.
The sector is therefore staring at a long period of economic slump and suppressed demand, it said in a statement, adding that long term fiscal and non-fiscal policy incentives from the government are needed to revive the industry quickly.
"The auto LPG sector has been hit the hardest because the major consumers of this clean fuel in the country are commercial vehicles and three-wheelers which are not plying. The industry needs help from the government through a series of fiscal and non-fiscal policy interventions to survive this difficult period," the association's Director General Suyash Gupta said.
"We particularly request that corporate tax on auto LPG operators and station owners be reduced to 15 per cent for FY 2020-21 and a six-month tax holiday is provided for new retail outlets to be commissioned during FY 2020-21," he added.
While the demand for petrol and diesel is expected to pick up again once restrictions are lifted, the auto LPG association expects the curve to be longer because of three-wheeler usage is likely to remain low on account of social distancing norms.
Currently, there are over 1,400 Auto LPG Dispensing Stations (ALDS) in the country. With the nationwide lockdown resulting in the stoppage of all transport vehicles across the spectrum of transport, the operators and franchisees of the ALDS stations are bearing the costs of salaries, rentals and other overheads on almost zero revenues, the industry body said.
Apart from direct tax concessions, IAC also reiterated the need to tax auto LPG at 5 per cent GST - the same rate as domestic LPG.
This move should help in reduction of price to the customer and reduce pilferages in the system, it said, adding that auto LPG accounts for less than 2 per cent of the overall LPG sales in the country.