New Delhi: Automotive component makers body ACMA today asked the government to restore weighted deduction of 200 per cent on R&D expenditure as part of its Budget wish-list for 2017-18.
The Automotive Component Manufacturers Association (ACMA) also emphasised to keep auto components at 18 percent tax rate bracket in the upcoming GST.
"We anticipate the forthcoming Union Budget to uplift the market sentiments which will allow for growth and development of the domestic auto components sector," ACMA President Rattan Kapur said in a statement.
Achieving world-class quality and new product development will only be possible in the auto component industry by enhancing spend on R&D and creating relevant infrastructure for innovation, he said.
"With significant changes in emission and safety regulations, it is imperative for the component industry to enhance their R&D expenditure. It is therefore critical that earlier weighted deduction of 200 per cent on R&D expenditure be immediately restored," Kapur said.
Besides, it is critical that the GST rate on auto components is low and a reasonable transition period is extended to the industry to effectively adapt to the changes in the taxation environment, he added.
"A higher GST rate could adversely impact the auto component industry especially the aftermarket that continues to suffer due to issues of counterfeiting, non-genuine, substandard, imported parts. The auto components should therefore be kept at the lower rate of 18 per cent rather than the 28 per cent rate," ACMA said.
The industry body also asked the government to eliminate or reduce customs duty on alloy steel and secondary aluminium alloy.
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Published Date: Jan 03, 2017 18:09 PM | Updated Date: Jan 13, 2017 20:19 PM