ACMA wants uniform 18% GST on all auto components in Union Budget

Automotive Component Manufacturers Association (ACMA), the apex body of the Indian auto component industry, in its recommendations to the Government for the forthcoming Union Budget, has stressed on the need to ensure a uniform GST rate of 18% on all auto components. It has also requested for the government to consider upward vision of RoDTEP rates adopting measures for enhancing investments, including that for R&D.

Sunjay Kapur, President, ACMA said, “The automotive industry is witnessing one of the most challenging, yet interesting times, ever. Disruptions due to the pandemic, new technologies and regulations are redefining mobility. In this backdrop, the recent policy announcements by the Government on PLI scheme for ACC Battery, PLI for Auto & Auto Components and extension of FAME-2 scheme are indeed very timely and will facilitate the Indian automotive sector in becoming integral to global automotive value chains as also staying relevant.”

Kapur emphasised, “The auto component industry, being an intermediary, has recommended for a uniform GST rate of 18 per cent on all auto components. The industry has significant aftermarket operations that are plagued by grey operations and counterfeits due to the high 28 per cent GST rate. A moderate rate of 18 per cent will not only address this challenge but will also enhance the tax base through better compliance.”

“That apart, with focus of the Government on environment, energy security and vehicular safety, it is an imperative for the auto components industry to invest in newer technologies and create capacities to meet the growing domestic demand for such products. Facilitating investments for capacity building and encouraging R&D and new product development will be steps in the right direction by the government,” added Kapur.

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