The SIAM Budget Wish List
The Society for Indian Automobile Manufacturers is of the firm view that unless Value Added Tax is implemented in a manner that will eliminate the cascading effects of taxation and adequately address the concerns of the industry, there is no case for reforms in import tariff in isolation. The VAT implementation programme as it is presently proposed, does not address issues of multi-tiered and inter-state operations as in the Automobile Industry, according to SIAM.
SIAM urges the government to articulate an Auto Policy and says that the proposals for the Union Budget 2002-2003 should be in line with and integral to the Auto Policy.
SIAM wants the government to adopt policies that promote value addition in India, encourage research and development, remove the cascading tax structure and other procedural bottlenecks to provide the Indian Industry a conducive environment.
Following are some of SIAM's recommendations:
Excise Duty Structure:
- SIAM has suggested that the excise duty be made uniformly applicable to all body builders whether in the organised sector or in the unorganised sector.
- Alternatively, SIAM suggests that as prevalent in the early nineties a specific excise duty, say Rs 4,200-8400 may be collected at the point of clearance of the chassis and exempt body building activity completely.
- The government should align the excise tariff classification for vehicles under tariff headings 87.02 & 87.03 to Harmonised System Nomenclature.
- Reduction in excise duty for vehicles with a seating capacity of up to 8 persons, excluding the driver to 16 per cent. Or atleast reduce it to 24 per cent from the present level of 32 per cent.
- For vehicles with a seating capacity of 9 -12 persons, excluding the driver, a reduction in excise duty from 32 per cent at present to 16 per cent.
- The benefit of lower excise duty available to cars registered as taxis should be extended to Multy-Utility-Vehilces (7-12 seaters, excluding drivers) used as taxis.
- Reduction in the excise duty for ambulances.
Customs Duty Structure:
- SIAM has reiterated the long pending demand of revisiting the bound rates for commercial vehicles falling under 87.02 & 87.04 and raising the customs duty from the present level of 35 per cent for both used & new vehicles falling under this category to 105 per cent and 60 per cent for used and new vehicles respectively.
- Reduction in customs duty on components i.e. imports in any form other than completely-built-units to 30 per cent from the current level of 35 per cent.
- Concessional import duty for components of electric vehicles and on raw material for CNG conversion kits (currently duty on raw materials is more than the duty on final products/components of CNG conversion kits).
Promotion of R & D and upgrading testing facilities: SIAM has urged the government to encourage R & D in the automotive sector by providing fiscal incentives. SIAM also says there is an urgent need to invest in the upgradation and modernisation of the existing test facilities and creation of new facilities to meet the existing and future testing & certification requirements of the automobile industry.
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