Auto industry expects GST cuts and EV push from the interim Budget

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The Automotive Component Manufacturers Association (ACMA) recommended a uniform GST rate of 18% on all auto components and more encouragement towards funding of technology development and acquisition in the country. The industry has significant aftermarket operations and is “plagued by grey operations and counterfeits due to the high 28% GST rate,” according to ACMA. “A moderate rate of 18 percent will not only address this challenge but will also enhance the tax base through better compliance,” said the association.

ACMA also emphasised on the reduction of import duty on aluminium and steel. Steel and aluminium alloys attract basic custom duty of 15% and 10%. The sector, largely dominated by Micro, Small and Medium Enterprises (MSMEs) is grappling with the high cost of raw materials. Reducing customs duty on raw materials, especially steel and aluminium alloys, which account for over 60 percent of the industry’s inputs, will enable the sector to deal with increasing costs, ACMA said.

“We anticipate the forthcoming Interim budget to uplift the market sentiments which will allow for growth and development of the domestic auto and auto component sector. With the entire auto industry undergoing a technological transformation on the front of emissions and safety, enhancing spend on R&D and creating infrastructure for innovation are of utmost criticality for the auto component industry to stay relevant,” said Vinnie Mehta, director general, ACMA.

Read More at: https://www.fortuneindia.com/macro/auto-industry-expects-gst-cuts-and-ev-push-from-the-interim-budget/102883

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