The Hindu Business Line : ATMA wants special excise duty on tyres for replacement market to go

THE Rs 12,000-crore domestic tyre industry has pitched for removal of the 8 per cent special excise duty (SED) on tyres manufactured for the replacement market. Such tyres currently attract 24 per cent excise duty — 16 per cent basic excise duty (BED) plus 8 per cent SED.

The Automotive Tyre Manufacturers' Association (ATMA) has, in its pre-budget submissions to the Finance Ministry, made a case for reducing the overall excise duty on tyres supplied for the replacement market to 16 per cent.

"We want the 8 per cent SED on tyres for the replacement market to go. The overall excise duty on such tyres should be brought down to 16 per cent, which is the current rate for most of the commodities," Mr D. Ravindran, Director-General, ATMA, told Business Line here.

He held that tyres for the replacement market should not be treated like a luxury good and clubbed under the list of goods on which 24 per cent excise duty is imposed.

"Two or three years back, the Finance Ministry was keen to reduce the excise duty. But revenue considerations had prompted them against any such move. We are hopeful that this time round the Finance Ministry would accept our submissions and reduce the excise duty to 16 per cent," he said.

On animal-drawn vehicle (ADV) tyres, ATMA has suggested that the excise duty be reduced from 24 per cent to 8 per cent.

ATMA has also called for reduction/waiver in customs duty on polyester tyre cord and butyl rubber (used in inner tubes). Both the materials are imported and there are no domestic manufacturers of these items.