Auto sector wants govt to continue with present sops

Auto sector wants govt to continue with present sops
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First Published: Sun, Jun 28 2009. 12 37 PM IST
Updated: Sun, Jun 28 2009. 12 37 PM IST
New Delhi: With last year’s decline in sales due to economic meltdown still haunting the auto makers, the industry wants the government to continue with sops announced in the two stimulus packages and ensure easy availability of finance in the forthcoming general budget.
Major auto players want the government to continue with the 4% CENVAT cut and further bring down the excise duty to 85 from 10%, as announced in the two stimulus packages in December and January.
To fuel sales of commercial vehicles, which are still falling, the auto makers feel that speedy implementation of infrastructure projects, coupled with some additional incentives, will be a strong way forward.
“Availability of finance at reasonable cost is important for the industry, without which sales of vehicles can’t be revived,” Maruti Suzuki India chairman R C Bhargava said.
On the commercial vehicle front, he said: “Better implementation of infrastructure will boost the sector. CV segment will grow if infrastructure projects grow, like highways, power plants etc.”
Benefits of the two stimulus packages should continue as the auto sector has not fully recovered yet and withdrawal of the incentives could even push the sales into negative territory, he added.
Expressing similar sentiment, Bajaj Auto Chairman Rahul Bajaj said: “Export markets are severely hit due to global financial turmoil, so we need to improve the domestic demand... Banks should lend at reasonable rate to customers.”
Because of “some mistakes” in the past, banks have huge non-performing assets and so are hesitant to lend to poor people, he added.
Bajaj also said the companies, which do not import huge amount of goods, should be allowed to utilise the incentives received under the Duty Entitlement Pass Book Scheme (DEPB) by redeeming them in monetary terms.
DEPB is a duty credit entitlement issued to companies on post-export basis to neutralise the incidence of customs duty on their import content.
The country’s largest exporter Hyundai Motor India spokesperson Rajiv Mitra said the government should provide sops to boost overseas sales. Besides, he urged the government to remove differential excise duties for different sizes and class of cars.
General Motors India Vice-President P Balendran sought uniform tax structure and said the additional excise duties of Rs15,000 and Rs20,000 on cars of 1500 cc and above should be removed.
He added excise duty on large cars should be brought down from 20% and uniform taxes should be implemented, apart from encouraging production of electric and hybrid vehicle projects.
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First Published: Sun, Jun 28 2009. 12 37 PM IST
More Topics: Budget 2009 | Sector Wishlist | Auto | Finance | Sops |