It’s a fact, everyone in this country who voted for change amidst the euphoria that surrounded one person, will be watching very keenly as the new government unfolds it’s first general budget, the entire nation expecting the New Prime minister to walk the talk.
Representing a struggling industry, The Society of Indian Automobile Manufacturers (SIAM), met the Commerce Minister recently suggesting reduced excise duty on vehicles, a new Free Trade Policy, better incentives for exports and free inter-state movement of vehicles. High on the SIAM’s wishlist is a uniform excise duty on passenger cars, implementation of GST and a scrappage policy. It has also sought support for promoting electric and hybrid vehicles, enhancement of road safety and implementation of better emmission norms. Meanwhile the Automotive Component Manufacturers Association (ACMA) has sought removal of customs duty on alloy steel, mild steel, Aluminium alloy and secondary aluminium alloy. Domestic steel and aluminium alloy suppliers have benchmarked prices as per landed price of imported alloys, making inputs expensive for domestic manufacturers. Various trade agreements implement reduced customs tariffs compared to basic raw materials needed for manufacturing, resulting in inverted tariff structure.Elimination of customs duty on raw materials should set things right.
Certain manufacturers have to generate their own power due to power shortage and such units should be allowed to avail input credit on Diesel procured for internal power generation. ACMA also suggest the government should take steps to encourage R&D, suggesting the 200% weighted deduction to be carried over to R&D facilities outsourced to third party institutions. ACMA also suggested the depreciation rate on capital goods to be enhanced from 15% to 25%, while domestically produced capital goods should be allowed 40% depriciation, encouraging capital investment.
FADA (Federation of Automobile Dealers Association) have asked the finance minister to unify the excise duty to 12% on all cars, irrespective of size or engine capacity. In their letter, they have stated that, the depreciation allowance
on cars, UV’s and MPV’s may be increased to 33 1/3% as ownership cycles have reduced. FADA has asked for accelerated depreciation allowance of 60% for commercial vehicle purchases extending for two years.