TAXATION
SYSTEM IN AUTO INDUSTRY
Industry has been
representing in favour of lowering the incidence of tax and introduction
of Value Added Tax System for further encouraging the growth of
this sector in India.
The details of duty on various types
of vehicles are as under :-
- Excise Duty :
|
S.No.
|
Item
|
Rate of Duty
|
|
1.
|
Cars and Multi Utility Vehicles
(MUV)
|
24%
|
|
2.
|
Other vehicles
|
16%
|
|
3.
|
Chassis of bus and truck
|
16% + Rs.10,000 per chasis
|
|
4.
|
Other Parts
|
16%
|
- Custom Duty :
|
S.No.
|
Item
|
Rate of Duty
|
|
1.
|
Old car and two wheeled vehicles
|
105%
|
|
2.
|
Completely Built Up Units (CBU)
of above
|
60%
|
|
3.
|
Semi Knocked Down (CKD)
|
60%
|
|
4.
|
Completely Knocked Down (CKD)
and parts
|
25%
|
|
5.
|
Other vehicles
|
25%
|
Apart from Excise
and Custom duty as the case may be, a vehicle sold in India also
attracts Central & State Sales Tax, local taxes, road tax
besides registration and insurance charges. In case of customs
duty, the rates on new and old cars are aimed at encouraging adequate
value addition in the country. The growth rate in this sector
during the last two years is 12.54 per cent and 14.80 per cent
respectively.
Announcement of Auto
Policy in March 2002, gradual rationalisation of incidence of
taxation, increased budgetary allocation for research and development
in this sector and India's joining of Working Party 29, a United
Nations' outfit on Harmonisation of Standard (W.P.29) as its Observer
Member are some of the recent measures that have been initiated
by the Government to encourage the auto industry.
This information
was given in the Lok Sabha today by Shri Balasaheb Vikhe Patil,
Minister of Heavy Industries and Public Enterprises in a written
reply to a question by Shri T.T.V.Dhinakaran.
