Automobile Sector expectations from Union Budget 2019

SIAM (Society of Indian Automobile Manufacturers) has made following recommendation: - Rationalization of GST and bring the base rate to 18% for all types of vehicles - GST cess only for luxury vehicles and 5% GST for electric and fuel cell vehicles. -Status quo for CBUs of passenger vehicles and two-wheelers. -Customs duty for CBUs of commercial vehicles to be increased from 25% to 40% (excluding CKD/SKD of CV. -It is suggested that year wise plan for reduction of Income-tax rate for Corporates (without any linkage to turnover) should be notified and 200% weighted deduction on R&D expenditure should be restored. -The Government should one time incentivise replacement of vehicles, which were registered before the year 2000 when the first emission norms were introduced and put in place a robust Inspection & Certification regime to control such vehicles of later vintage. The incentives could be in the form of rebate in GST, No road tax, subsidized finance like what happened in Delhi for Public Transport Vehicles.

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