The Finance Ministry has turned down a demand from automobile makers for a cut in the import duty on motor vehicle parts.

Encouraged by the Government’s move to extend the concessional excise regime for all kinds of commercial and personal vehicles till December, automobile makers are now pitching for a cut in the import duty on motor vehicle parts.

“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 the excise duty concession for vehicles till December,” a senior Revenue Department official said at a post-Budget interaction with industry representatives.

As for extending the concessional excise duty regime beyond December, the official said that the Government would have to take a decision on this.

The automobile industry wants the Government to take a long-term view on fiscal concessions rather than extending their validity periodically.

“When the Government can take a long-term approach to tax holidays for the power sector in the latest Budget, there should also be a similar effort for automobiles,” said an official from the automobile industry. In the interim 2014-15 Budget presented on February 17, excise duty was reduced on all categories of personal vehicles as well as commercial vehicles by four to six percentage points.

This concessional excise duty regime was initially applicable till the end of June, but was later extended till the end of December 2014.

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