New Delhi: Auto component industry body ACMA on Monday sought uniform 18 percent GST in the upcoming Budget.
Currently, about 60 percent of auto components are at taxed at 18 percent, while the remaining high-value parts attract a duty of 28 percent.
The auto component segment, which currently employs 50 lakh people and contributes 2.3 percent to India's gross domestic product (GDP), also urged the government to come up with a fund to support R&D and indigenous technology development.
"The automotive industry in India is undergoing a significant transformation due to new regulations and policy changes. On top of it, the economic slowdown has deterred domestic consumption, we hope that the forthcoming budget will help uplift both the consumer and industry sentiments," Automotive Component Manufacturers Association of India (ACMA) president Deepak Jain said in a statement.
To meet the government's vision of a $5 trillion economy by 2025, of which the manufacturing industry would be $1 trillion, it is critical that steps be taken to get the automotive industry back on track, he added.
"We are hopeful that the government would consider our long-standing recommendation of 18 percent GST on all auto components as also extend impetus to R&D and indigenous technology development," Jain said.
The industry body also sought import duty exemption on auto component prototypes to encourage domestic R&D and testing.
"Also retaining of weighted tax deduction on R&D expenditure is critical. The 2016-17 Budget reduced weighted deduction benefit from 200 percent to 150 percent and has further restricted the deduction to 100 percent from 1 April 2020," Jain said.
ACMA also urged the government to reintroduce investment allowance at 15 percent for manufacturing companies that invest more than Rs 25 crore in plant and machinery.
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Updated Date: Jan 27, 2020 18:53:15 IST