Home New Cars Used Cars Car Prices Service Centers Car Dealers Image Gallery Blog Insurance Finance Bikes USA Drives
Upcoming Cars Latest Cars Test Drive Latest News Car Comparison New Car Reviews Used Car Reviews Driving Tips Buyers Guide

ACMA recommendations for Union Budget 2014-15







India’s new Prime Minister had taken the charge of office recently, and everyone out there in the country is expecting him to bring in the changes by waving his magic wand, which though may not feasible entirely. The Automotive Component Manufacturers Association (ACMA), the apex body for the Indian auto component industry, has identified various points that it is needed to be taken up at the upcoming Union Budget 2014.

Auto industry of India is going through a rough patch, where it is in the immense need of someone to bail it out on the better notes. Issues like currency, high inflation and increasing interest rate are affecting it adversely, where the new government can barge through, and can take stern steps to clear the fuzz.

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

ACMA recommendations for Union Budget 2014-15

Mentioned below are the proposed recommendations of ACMA that are going to be placed in front of the new government seeking limelight in the upcoming Union Budget 2014:

  • Indirect Tax:

Continue 10% Excise duty on Auto Components

It is recommend to continue with the existing rate of 10% on chapter 84 and 85 items, which is currently valid only till June 30, 2014.

Eliminate Customs Duty on Alloy Steel, Mild Steel, Aluminium Alloy and Secondary Aluminium Alloy

Domestic Steel / Aluminium Alloy suppliers benchmark their prices based on the landed prices. This makes the inputs expensive for the domestic component manufacturers. Further, due to various trade agreements, auto components are facing reduced customs tariffs in comparison to the basic raw materials needed for their manufacture; this has resulted in inverted tariff structure in some of the cases. Elimination of customs duty on the raw material will therefore set right the equation.

Allow Input Credit on Diesel

Due to power shortage manufacturers have to resort to generating their own power though gen-sets thus increasing the cost of production. It is recommended that such manufacturers be allowed to avail input credit on diesel procured for internal power generation.

100 percent Cenvat Credit on Capital Goods in Year of Purchase

Currently 50% Cenvat credit is allowed on capital goods during the year of purchase. The remaining balance 50% is allowed to be availed in subsequent years. To encourage investments, 100% Cenvat Credit may be made available in year of purchase itself.

Service Tax – Credit on various Services should be provided

Services like canteen, transportation of employees, repair and maintenance of commercial vehicles etc. are directly related to manufacturing; therefore manufacturing units should be allowed to avail Cenvat credit on such services.

Early Implementation of GST / Phasing out CST

There is an urgent need to reduce multiplicity and complexity of applicable taxes through early implementation of GST. Further, it is recommended that till such time the GST is implemented, CST be reduced to 1% from existing 2%.

  • Direct Tax:

Encourage Research & Development

Presently 200% weighted deduction under section 35(2AB) of the Act is available for in-House R&D facility and 175% weighted deduction on outsourced R&D from approved Institutions i.e. National Laboratories, Universities, Scientific Research Institutes and IITs. A 200% weighted deduction should be extended to R&D facilities, which are outsourced to Third-Party service providers or other institutions.

Depreciation Rate on Capital Goods

The current depreciation rate on Capital Goods should be enhanced to 25% from 15%. Further, domestically manufactured capital goods be allowed 40% Depreciation. This will encourage Capital investment in the industry

Similar Articles

  • No Related Post

Give your Review on this Car

Your email address will not be published. Required fields are marked *

*
*

CommentLuv badge
Follow Us