NEW DELHI: Auto sector lashed out at the government for trying to impose higher tax on diesel cars, while preparing to cut duties on those imported from Europe.
“What we expect from the upcoming Budget is that there should not be diesel tax. It is not the right time for it,” General Motors India President and Managing Director Lowell Paddock said.
There has been calls from different quarters to tax diesel cars saying subsidised fuel has been benefiting the affluent.
Several auto companies, including Ford India, have stated that their business plans for India could be impacted if ‘diesel tax’ is imposed.
The recently concluded India-EU summit on working out a comprehensive free trade agreement (FTA) was closely followed by the Indian automobile industry as slashing of duty on imported vehicles was one of the key discussion points.
The Government has assured that it would protect interest of Indian auto makers in EU FTA. The auto industry would be hoping for similar type of commitment from the forthcoming budget.
Chetan Kakariya, Senior tax professional in a member firm of Ernst & Young Global, said, “Rationalization of tax structure may be achieved by merging multiple levies under Central Excise to a single rate. Reduction in excise duty rates and abolishment of National Calamity Contingent Duty would increase the competitiveness of Indian auto manufactures.”
Even though the days are too early to predict, Government may need to plan ahead to make India an auto manufacturing hub by coming up with a strong budget in support of the auto industry.