New Delhi, Jan 12 : Industry body Automotive Component Manufacturers Association (ACMA) has urged the Centre to implement a uniform GST rate of 18 per cent on all auto components.
In its suggestions for the forthcoming Union Budget, the ACMA requested the federal government to think about the upward imaginative and prescient of ‘RoDTEP’ (Remission of Duties and Taxes on Exported Products) charges together with adopting measures for enhancing investments, together with that for R&D.
“The auto component industry, being an intermediary, has recommended for a uniform GST rate of 18 per cent on all auto components,” ACMA President Sunjay Kapur mentioned.
“The industry has significant aftermarket operations that are plagued by grey operations and counterfeits due to the high 28 per cent GST rate. A moderate rate of 18 per cent will not only address this challenge but will also enhance the tax base through better compliance.”
Furthermore, the trade physique identified that present RoDTEP charges for auto parts sector is at 1 per cent or decrease, and mentioned that these charges are insufficient to cowl the incidence of unrefunded taxes and duties borne on export merchandise.
“This is deterring the competitiveness of the Indian auto component industry,” the ACMA mentioned.
Additionally, it requested for provision to reintroduce funding allowance at 15 per cent for manufacturing firms that make investments greater than Rs 25 crore in plant and equipment.
“This will motivate manufacturers to invest in new technologies, specifically e-mobility and its components or ancillaries related plant and machinery,” the trade physique mentioned.
In addition, it really useful to retain the weighted tax deduction on R&D expenditure.
“The 2016-17 Budget reduced weighted deduction benefit from 200 per cent to 150 per cent and has further restricted the deduction to 100 per cent from 1st April 2020.”
“The association has also put forth several suggestions to ‘ease’ acost of doing business’ in India.”