Automotive component industry body ACMA has asked the government to ensure a uniform GST rate of 18 per cent on all auto components as part of measures to support the sector that is going through a downturn.
Automotive Component Manufacturers’ Association (ACMA) said there is also an urgent need to increase the rate of weighted deduction on R&D spend.
ACMA Director General Vinnie Mehta said that the industry has significant aftermarket operations, which is plagued by grey operations and counterfeits due to the high 28 per cent GST rate. A moderate rate of 18 per cent will address this challenge and also enhance the tax base through better compliance. Mehta also stated that the entire auto industry is undergoing a major transition with implementation of BS-VI and newer safety norms apart from the government’s intention to usher in electric mobility.
Mehta added that facilitating new product development through a technology development and acquisition fund, as also enhancing the rate of weighted deduction on R&D spend will be steps in the right direction by the government.
ACMA suggested setting up of a fund for supporting R&D and indigenous technology development for shift from BS IV to BS VI, electric mobility and to meet new regulations on safety emission and environment.
Apart from seeking exemption of import duty on auto component prototypes, ACMA also said reduction of basic customs duty on raw materials such as steel and aluminium alloys that currently attract basic customs duty of 15 per cent and 10 per cent respectively, must be considered.
