The auto sector forming around 6% of India's
GDP.
Indian
auto industry was expected to reach the size of $145 billion, around 10% of the
GDP, by 2016.
The slowing demand has lowered auto industry’s growth to 4.57% in the
first nine months of 2012-13, because of declining sales due to high interest
rates, increasing fuel costs and raw material prices. In a pre-budget presentation
to the Union finance minister, the industry is seeking an excise duty structure
as stated in the auto policy and the 10 year Auto Mission Plan and has asked
for a concessional excise duty structure, an equivalent GST to be applicable at
10% flat across all segments such as cars, two-wheelers and commercial
vehicles.
The government should strive for early
introduction of GST which would pave the way for rationalising the tax
structure. The other ancillary manufacturing sectors in the industry have also
been demanding faster implementation of GST. Automotive Tyre Manufacturers'
Association has demanded permission to allow import of limited quantity of
natural rubber under a Tariff Rate Quota (TRQ) basis for FY 2013-14 at a
concessional duty rate of 7.5% or
`.10 per kg, whichever is lower. Industry wants a
relook at the customs duty on natural rubber or increase in the existing
customs duty on tyres to correct duty inversion. The tyre industry in India has
asked for a complete waiver of import duty on raw materials used by it which
are not manufactured domestically. The Automotive Component Manufacturers'
Association of India has asked for uniform taxes on components that go
into the manufacturing different vehicles.
On Tuesday, a mixed trend is being witnessed in
natural rubber in the global market. TOCOM rubber futures were swinging between
positive and negative turfs. The most active rubber contract on TOCOM, July
delivery closed at ¥324.2 per kg. and on Wednesday it is expected to trade in
negative. Indian natural rubber market continue to be on the weaker side as
consumption declines amidst slowing auto sales and unfavourable macro economic
conditions.
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