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Auto Industry asks for discount; Seeks tax incentives from Government

February 12, 2014, 01:23 PM IST by Ranjan R. Bhat
Auto Industry asks for discount; Seeks tax incentives from Government

The 12th Auto Expo ended yesterday on a high note, registering more than 5.6 lakh visitors throughout its seven-day run. Though the numbers seem like a good sign, pastures aren’t as green as they seem for the Indian automobile industry, withnegative growth for domestic car sales continuing into the four consecutive month.  The industry has been going through a tough time for a while now with the inflation, depreciating rupee coupled with theGovernment’s draconian taxes. Numbers released by the Society of Indian Automotive Manufactures (SIAM) say that the industry sold 7.6 per cent fewer cars last month than it sold in January 2013.

Speaking about the issue, Sugato Sen, deputy director general, SIAM, said, "There has been no respite for the past many months. Despite all the high discounts and freebies the industry continues to be in a negative. We have asked the government to go for uniform taxation structure and remove the variable excise duties levied on passenger cars. We are hopeful that the government will give us some sops in the budget next week.”

Currently automobiles attract excise duty ranging from 12 to 30 per cent while the commercial vehicles (CVs) are charged 12 per cent. The heavy CVs recorded a fall in sales for the twenty-third straight month, with January seeing a 17 per cent de-growth than a year earlier. Sales of trucks and buses also fell by 20.9 per cent in January. Praful Patel, minister of heavy industries, has already written to the finance ministry seeking a cutback in the excise duty on CVs to 8 per cent.

The compact SUV and the compact sedan segments have been the bright spots in an otherwise dull market. The two-wheeler market also continues to stay positive with sales of motorcycles having risen by 4 per cent while that of scooters by 28 per cent in the last month.

Source: ET

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