ACMA asks for uniform GST, revision of RoDEPT rates, Auto News, ET Auto
New Delhi:Automotive component industry body (ACMA) Tuesday asked the government to ensure a uniform GST rate of 18% on all auto components as part of measures to support the sector that is going through a downturn.
The apex body of the Indian auto component industry has also requested the government to consider revision of Remission of Duties and Taxes on Export Products (RoDEPT) rates adopting measures for enhancing investments including that for R&D, ACMA said in a release.
According to Sunjay Kapur, president, ACMA, the automotive industry is witnessing one of the most challenging, yet interesting times, ever. Disruptions due to the pandemic, new technologies and regulations are redefining mobility, he said.
“In this backdrop, the recent policy announcements by the Government on PLI scheme for ACC Battery, PLI for auto and auto components, and extension of FAME-II scheme are timely and will facilitate the Indian automotive sector in becoming integral to global automotive value chains while also staying relevant,” he added.
Kapur further said the auto component industry, being an intermediary, has requested for a uniform GST rate of 18% on all auto components. “The industry has significant aftermarket operations that are plagued by grey operations and counterfeits due to the high 28% GST rate. A moderate rate of 18% will not only address this challenge but will also enhance the tax base through better compliance,” he explained.
ACMA also said that RoDEPT rates notified for auto components sector at 1% or lower, are inadequate to cover the incidence of unrefunded taxes and duties borne on export products. This is deterring the competitiveness of the Indian auto component industry, the industry body added. The RoDTEP Scheme was introduced on January 1, 2021, replacing the MEIS scheme.
ACMA also pitches for a provision to reintroduce investment allowance at 15% for manufacturing companies that invest more than INR 25 crore in plant and machinery. This will motivate manufacturers to invest in new technologies, specifically e-mobility and its components/ ancillaries related to plant and machinery, it highlighted.
Lastly, to encourage domestic R&D and testing, ACMA recommended that the weighted tax deduction on R&D expenditure is critical. The 2016-17 Budget reduced weighted deduction benefit from 200% to 150% and has further restricted the deduction to 100% from April 1, 2020.