Car firms have divided opinions over import taxes

The proffered India-EU trade agreement has divided opinions, Pawan Goenka, the president Society of Indian Automobile Manufacturers (SIAM) is against to cut duty on the imported cars however many others which includes names such as Mercedes, BMW and Audi are wishing for lower tariffs.

SIAM does not wish for slash on the car import duties from the present 60 per cent and comes down to 110 per cent after adding of counter vailing duty (CVD), VAT and other taxes.

The industry side has made a strong volume to commerce department opposing the lowering of the duty (stated by EU), stating that it can strongly hamper the domestic players.

Mr Goenka said that they are not protecting themselves. He continued that all the trade in the country should not hurt the local industry. However SIAM members have divided opinions for the same. BMW, Mercedes and Audi are vocal about the same, while Honda also believes that import duty should be lowered mainly for the green technology such as hybrid vehicles.

Debashish Mitra, director, sales and marketing at Mercedes-Benz India said that it is not true that the Indian auto industry will be hampered if duty is decreased. However the argument lies that the duty should remain high on competitive volume cars . While he added that no arguments can support talks over maintaining higher duty for luxury end. With lower duties it will be easier to bring better and newer technologies in the country.

Michael Perschke, MD Audi India, also agreed on lowering duties for the cars above 2000 cc, as 80 to 90 per cent car market is below 2000 cc. Perschke said that the industry cannot get global protection by securing local market. With lower import taxes it will help in getting better auto mobiles. The lower duties is helping Indian auto mobile makers to expand in European auto market. As per a top official, BMW does not seem to be worried about the probability on the reduction in the duty on fully built cars. The company is more in favour of lower duty on CKD cars. Currently it is around 40 per cent.

As per the Japanese firms any concessions as per EU FTA is applicable for different FTAs such as with Japan. He also said that green and clean technologies, hybrid technologies, should be dealt in a separate section.

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