New Delhi: The past few days have witnessed some hectic buying of new cars by a large number of government employees. They are making the cash registers ring as the carmakers are trying to shore up sales in the last month of the ongoing fiscal.Most of the brands, Maruti Suzuki, Hyundai, Kia, Toyota Kirloskar Motor or Nissan Motor India, are having an unprecedented demand for instant deliveries as the deadline (March 31) approaches for availing of the LTC cash voucher scheme.
Under the scheme introduced by the Central government, employees are required to spend a sum equal to three times of the value of the deemed LTC fare on purchase of goods or services, liable to a goods and service tax (GST) rate of 12% or more, through digital mode between October 12, 2020 and March 31, 2021.
As per the government guidelines, an employee whose entitlement is about INR 1.35 lakh under LTC is required to spend at least INR 4.05 lakh to avail himself of the benefit which expires by this month-end.
As part of the government fiscal incentive to boost consumption, the employees making use of the scheme can purchase goods or avail services in the name of their spouse or their other family members eligible for the LTC fare as announced in their service records.
Deeksha Katyal, a Delhi-based water scientist at GGSI University, has booked a sedan to avail herself of the benefit under the scheme. “We have plans to upgrade from our existing WagonR to an SUV or a sedan, but I was told there is a waiting period of a couple of months for the same. Since the scheme is open till March 31 only, I booked a compact sedan to avail myself of the entitlement of around 1.5 lakh as LTC,” she told ET Auto.
As per the government guidelines, an employee whose entitlement is about INR 1.35 lakh under LTC is required to spend at least INR 4.05 lakh to avail himself of the benefit which expires by this month-end.~
Like Deeksha, many of her colleagues also have purchased new vehicles for the first time or upgraded their existing ones to get the benefits under the scheme.Rakesh Srivastava, Managing Director of Nissan Motor India, confirmed to ET Auto the trend of surging sales on the LTC benefit. “The LTC scheme benefit has acted as a strong stimulus for growth by bringing in many first-time buyers. It has also provided many an opportunity to replace their vehicles with new ones, as per our experience, with many Government employees preferring the all-new Nissan Magnite. It’s a strong government initiative and should be continued to drive personal mobility especially when public transport is seeing challenges with the COVID-19 pandemic.”
Many of the employees ET Auto spoke to confirmed their buying interest to utilise the LTC prudently for a positive asset. “As the pandemic has hit the travel plans, it makes sense to buy a new vehicle to claim the benefits or else it might get lapsed,” another senior government employee said.
“It is working in favour of the industry and we have witnessed some steady demand in March. Many of our models are on steady demand and this has led to increased and prolonged waiting for our cars,” Tarun Garg, director- sales and marketing, Hyundai Motor India, told ETAuto.
The dealer fraternity dittoed the sentiments on surging demand and stronger sales saying that the rising demand for a personally-owned vehicle amid the pandemic coupled with low interest rates has resulted in the long waiting period.
“There are models like the Mahindra Thar, Hyundai Creta, Kia Sonet and Maruti EECO that have waiting periods, which varies from a few weeks to nine months depending on the model and brand.
The times have changed at least in March with demand chasing sales and LTC and depreciation inducing demand to the next level,” a Delhi-based passenger vehicle dealer said.
