SIAM demands 8 per cent duty reduction on cars

In its pre Budget memorandum, SIAM also demanded waiver of 4% special additional duty.

The Rs 64,400 crore domestic automobile industry has asked Government to cut excise duty on cars by eight per cent and bring it down to 16 per cent to give a boost to the Indian car market which produced a record one million units last year.

HT Image

Taxes and duties added 40 per cent to the price of a car in the highly price sensitive Indian car market. Should the production tax or excise duty be brought down in the July 8 Union Budget, the car prices would come down substantially, Society of Indian Automobile Manufacturers (SIAM) said in a memorandum to the Government.

SIAM, which represents 35 local and foreign automakers, said the one per cent national calamity contingency duty, which was imposed last year, should also be abolished.

The industry also demanded that four per cent special additional duty be removed.

SIAM has also advocated introduction of incentives for scrapping of old, polluting vehicles in seven cities of the country to check pollution. The scheme should be extended to all over the country in the next 3-5 years.

The automakers were of the view that 10-year-old commercial vehicles and 15-year-old personal vehicles should be junked.

Out of 1,000 Indians, only eight own cars unlike 35 in a small country like Thailand and 450 in developed countries.

Of late, the auto industry, which has emerged as a manufacturing hub for small cars and sourcing hub for components, has been plagued with rise in steel prices.

India is the second-biggest two-wheeler market and fifth-largest for buses and trucks.