Budget expectations - Automobiles Sector

EXPECTATIONS - 

1. Subsume Road Tax, R&D Cess & Octroi in the proposed GST & also to provide clarity on applicability of GST on used-vehicles  market.

2.Duty drawback rates on exported vehicles should be restored to 5.5% from the current 2-2.5% especially for two wheelers.

3. Reduce Excise Duty rate on chassis from 14% to 10%; Increase depreciation rate to 60% from 40%; Start fresh round of JNNURM scheme for buses & extending the same for Inter City Buses also; Bring scheme for fleet modernization; Government purchase of CVs; Purchase of Ambulances through National Rural Health Mission; Extend credit scheme to larger NBFCs/Co-Op Banks.

4. Support to be given to National Electric Mobility Mission Plan (NEMMP) to promote the range of Electric Vehicles; Concessions to be provided & extended to at least 5years on identified parts of these vehicles; Hybrid & all electric CBUs (imported) should be taxed at 6%.

5 .75% Custom Duty on passenger cars/MUVs should stay; Increase duty on imported CVs to 40% from current 10%.

IMPACT - 

1. Positive – This could make the sector more organized & also earn revenue for the government.

2. Positive for the automobile manufacturers across all the segments.

3. Positive for the entire sector. It will help companies like TATA Motors Ashok Leyland among others. Moreover with  JNNURM schemes the State Transport Units will have continued access to funds to buy buses.

4. Positive for this new variants in automobiles. Besides promoting the usage of Hybrid & Electric Vehicles will also result in the savings of 2.2 – 2.5 million tones (estimated) of liquefied fuel by 2020.

5.Positive for the Commercial Vehicle manufacturers.