Industry & Economy
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Automobiles
Auto sector seeks tax sops for units
Neha Kaushik
New Delhi
,
Dec. 20
The auto industry has sought tax sops for automobile facilities that attract an investment of over Rs 500 crore. In a proposal to the Government, the industry has pointed out that the move would help to increase investments and make India a favoured destination for setting up of fresh capacity for vehicles.
Similar tax sops are already in place in Thailand. The industry feels that the tax incentives would be in line with the Government's stated objective of making India a hub for small cars.
Another demand from the industry is for a uniform tax structure for all cars at 16 per cent. At present, small cars enjoy an excise duty of 16 per cent, while the duty is 24 per cent for all other cars. A few automobile manufacturers have also urged for more clarity on the definition of a small car.
At present, only cars that are up to four metres in length and with 1,200 cc engine capacity (for petrol) or 1,500 cc (for diesel) qualify for the 16 per cent excise duty.
However, the Auto Policy defines a small car as having length of up to 3.8 metres with no mention of the engine capacity.
It is learnt that a section of the automobile industry is also lobbying for import duty concessions for introducing hybrid vehicles in the country. However, sources said that this demand is unlikely to be met in the forthcoming Budget.
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