Driven by government push to infrastructure sector the sale of construction equipment is expected to grow 10-15%. The growth expected in the segment this year will come despite an increase in the prices of construction machines under the goods and services tax (GST) regime. These construction equipment earlier attracted an excise duty of 12.5%, plus state taxes that ranged from 6% to 13.5%. Together, the tax incidence was maximum 26% which is now 28%.
According to data available with the Indian Construction Equipment Manufacturers’ Association, sales of equipment such as backhoe loaders, excavators, earth moving machines, pick-n-carry cranes and other construction equipment declined for three straight years before rising 2.5% to 36,800 units in 2015 and 41.5% the year after, to 52,100 units. The last time sale of construction equipment had peaked in 2011 at 52,500 units.
Sales of construction equipment at Tata Hitachi increased 46% to 6,800 units in the last financial year ended March 31, executives are quite optimistic of the midterm prospects. Similarly JCB India is also expecting 10-15% growth on the back of infrastructure push driven by real estate, roads, irrigation, railways,