Budget 2014: Auto component makers pin high hopes
Budget 2014: Auto Component Makers Pin High Hopes. Auto component makers are pinning high hopes on the new government to hasten industrial revival in the country and boost overall growth in the economy.
Chennai: Auto component makers are pinning high hopes on the new government to hasten industrial revival in the country and boost overall growth in the economy.
Faced with challenging issues such as currency fluctuations, high inflation and increasing interest rates that have significantly dented vehicle sales, the Automotive Component Manufacturers Association (ACMA) has sought urgent interventions in the areas of duty and taxation.
Voicing its expectations to from the upcoming Union Budget 2014, the apex body has sought to continue 10 per cent excise duty on auto components, which is currently valid only till June 30, 2014.
The body has also asked for eliminating customs duty on steel and aluminium alloy that make landed cost higher. “Apart from expensive inputs, due to various trade agreements, auto components are facing reduced customs tariffs in comparison to the basic raw materials needed for their manufacture resulting in inverted tariff structure in some of the cases,” said ACMA president Mr Harish Lakshman.
To offset power costs caused by acute shortages, auto component makers have also sought help in manufacturers getting input credit on diesel procured for internal power generation. This apart, 100 percent Cenvat credit on capital goods and services such as canteen, transportation, maintenance of commercial vehicles etc. have also been requested.
“There is an urgent need to reduce multiplicity and complexity of applicable taxes through early implementation of GST. Further, it is recommended that till time, CST be reduced to 1per cent from existing 2 per cent,” Mr Lakshman said.
On the R&D front, component makers want 200 per cent weighted deduction to R&D facilities outsourced to third-party service providers along with a hike in depreciation rate on capital goods from 15 per cent to 25 per cent.