India’s finance ministry has turned down automobile makers’ demand for cut in import duty on motor vehicle parts.
According to The Hindu‘s Business Line, automakers, encouraged by the recent government move to extend the concessional excise duty regime for all kinds of commercial and personal vehicles till December, were pitching for a cut in excise duty on motor vehicle parts.
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“We can’t agree to demands for any cut in import duty on motor vehicle parts. This is because of revenue constraints. We had only recently extended excise duty concessions till December,” a senior ministry official said.
As for extending the concessional excise duty regime beyond December this year, the senior official said that this call had to be taken by the government.
“All that I can tell you is that the concessional excise regime for automobiles, consumer durables and capital goods will be valid till end December. Whether it will be extended beyond that date or not is still to be decided”, the official said.
The automobile industry is keen that the government take a long-term view on fiscal concessions rather than extending their validity periodically, the business paper noted.
“When the government can take a long-term approach to tax holidays for power sector in the latest budget, there should also be similar effort for automobiles”, an automobile industry representative told senior finance ministry officials at a post-budget interactive meeting organised by CII.
