Mr. Praful Patel stands by Automobile Industry against New Custom Duty norms

Acting as much required relief factor for auto industry, Praful Patel, Heavy Industries and Public Enterprises Minister said that his ministry has asked the Finance Ministry to grant two years' time span to the auto industry for fulfilling the new custom tax standards for completely knocked down (CKD) units. He said that his ministry sent an official request to the finance ministry along with the request from SIAM. And auto industry requires time extension for adopting the new norms.

Earlier in 2011-12 budget, in an attempt to promote the in-house production of automobiles, Finance Minister Pranab Mukherjee gave new meaning to the rules regarding completely knocked down (CKD) units. As a result, the commodities like pre-assembled engines, gearboxes and transmissions were tagged with 30 percent import duty in lieu of 10 percent duty earlier.

As per reports, the Society of Indian Automobile Manufacturers (SIAM) is suggesting the government to decrease the custom duty or to provide more time to car makers for complying with the new norms.

If sources are believed, as the new custom norms comes into being, it will not only increase the cost of car production but it will also make introduction of new cars in the market more difficult for automobile giants like BMW, Mercedes and Audi.Due to this, Audi said that such norms will force them to re-analyze their India plans.

Patel said that the idea behind sending the official request was to encourage the adoption of new norms. Further he said that now all decisions depend on the Finance Ministry to decide on and two year time is quite sufficient for fulfilling the new custom duty norms.Patel was speaking at the event organized by BMW on Vision efficient Dynamic concept cars. He said that it is true that India is still in learning phase regarding the hybrid and diesel technology, but good progress has been done in this sector.