To revive auto industry, end custom duty on raw material: ACMA

Modified On Nov 25, 2016 06:37 PM By Sourabh

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In order to revive the Indian auto-industry, Automotive Component Manufacturers Association (ACMA), the apex body for the Indian auto component industry has asked the BJP led NDA government to abolish custom duty on the alloy & mild steel, aluminium & secondary aluminium alloy. The association also asked to continue with the 10 per cent duty on components to strengthen the industry.

To revive auto industry, end custom duty on raw material: ACMA

The Indian auto-sector is facing some serious problems such as slow growth, slump in sales, increasing interest rates and depreciating Indian currency. Almost every auto manufacturer has witnessed a significant downfall in the sales. ACMA tried to create different opportunities to revive the industry and boost the sales of vehicles.

To revive auto industry, end custom duty on raw material: ACMA

“The automotive industry is one of the key drivers of the Indian economy, which is currently undergoing unprecedented downturn, it is therefore critical that focused attention be given for stimulation of the automotive industry; we are hopeful for a favorable outcome from the forthcoming budget” said Mr. Harish Lakshman, President, ACMA.

To revive auto industry, end custom duty on raw material: ACMA

ACMA proposed many recommendations such as continuation of 10% Excise duty on Auto Components which is currently valid only till June 30, 2014. The association also emphasised on the elimination of custom duty on Alloy Steel, Mild Steel, Aluminium Alloy and Secondary Aluminium Alloy, Input Credit on Diesel, 100 percent Cenvat Credit on Capital Goods in Year of Purchase, Early Implementation of GST / Phasing out CST. ACMA also suggested on encouraging research and Development along with the depreciating the Rate of Capital Good from 25 per cent to 15 per cent. Currently, 50 per cent Cenvat credit is allowed on capital goods during the year of purchase, while the remaining is allowed to be availed in subsequent years, the Association said.

"This makes the inputs expensive for the domestic component manufacturers. Elimination of customs duty on the raw material will therefore set right the equation," Automotive Component Manufacturers Association (ACMA) said in its budget suggestions to the Union Finance Ministry today.

"It is recommend to continue with the existing rate of 10 per cent on chapter 84 and 85 items, which is currently valid only till June 30. Also, the domestic steel/aluminium alloy suppliers benchmark their prices based on the landed prices.

Encouraging research and development, hiking of depreciation rate on capital goods to 25 per cent from 15 per cent at present and an early roll out of the Goods and Services Tax are the other demands sought to be incorporated in the Union Budget, which is to be presented early next month.

Source: PTI

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