India reviews duty reduction on imported cars from Europe
Despite increase in basic customs duty on imported cars levied in the 2012-13 Union Budget, the Heavy Industries Minister Mr. Praful Patel has come up with a calibrated reduction in duty on cars imported from Europe. Earlier this year saw a hike in basic customs duty from 60% to 75% on all cars imported from Europe that were priced over $40,000 with engine capacity over 3,000 cc for petrol cars and 2,500 cc for diesel cars.
Commerce Minister, Mr. Anand Sharma in conjuncture with Mr. Praful Patel, Heavy Industries and Public Enterprise Minister feel that even though the domestic auto industry needs protection there is still a need to introduce a calibrated duty reduction on all vehicles imported from Europe. “Yes, we had a meeting wherein our department has reiterated its stand that the interest of domestic manufacturers needs to be protected. If the government has to consider a duty cut, it can be considered later in a calibrated manner,” Patel said.
This proposal however has not gone down well with the domestic automobile industry which feels that imposing such cuts will hamper their progress in a scenario which is already causing much strain on the industry. Recent increases in excise duties, rising interest rates, a depreciating economy and continual petrol price hikes have all had an adverse effect on auto sales within the country.
Sharma and Karel De Gucht, the EU Trade Commissioner are likely to meet this month to iron out these tax concession intricacies and take decisions a step further. 14 rounds of talks have already been held. These tax concessions if implemented will play a major role in promoting auto companies such as Audi, BMW, Mercedes Benz, VW, Fiat and Skoda.