Click to play videoNew Delhi: Budget 2006 was a different story for small car makers. This year the heavy industry ministry is asking for a uniform excise duty benefit of 16 per cent.
Finance Minister P Chidambaram gave an excise duty boost to small cars in the last budget. This year the Society of Indian Automobile Manufacturers (SIAM) and the heavy industries minister have together pitched for a uniform excise duty on all passenger vehicles i.e. passenger cars, MPVs and MUVs of 16 per cent.
The industry hopes that Government will remove the anomaly of only giving excise cut to small cars thereby creating disparity among manufacturers. “The duty should be fixed at 16 per cent,” said Dilip Chenoy DG, SIAM.
“That’s the uniform excise duty across all models. Though there should be no disparity in terms of excise benefit between small and large cars,” said Wilfried Aulbur MD & CEO, Daimler Chrysler.
Given the huge investments planned in this sector, industry wants the benefit of weighted deduction at 150 per cent of R&D Expenditure of Income Tax Act, extended for a period of 10 years for both in house and outsourced R&D.
“We should look at the R&D incentive which was announced last year. 150 per cent R&D incentive expires on March 31. We are requesting for it to continue for the next term,” said Pawan Goenka President, Automotive Sector, M&M.
What is still to be seen in this budget is the final definition of a small car. According to auto policy 2002, small car was defined as a car with a length of 3.8 m or less without any engine specifications. Last year's budget changed this definition to any car which is 4 m in length or less with a engine size of 1.2l for petrol an 1.5 l for diesel.
Interestingly, there has been demand from a section of industry to revert back to auto policy definition while others like Hyundai and GM oppose the move.
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