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Siam lauds the Finance Ministry

January 20, 2014, 12:18 PM IST by Selvin Jose
Siam lauds the Finance Ministry

Society of Indian Automobile Manufacturers (SIAM) the automobile industry’s representative body has received a clarification issued by the Ministry of Finance on January 15, 2014, on the implementation of the Excise valuation rules, in accordance to the Supreme Court decision, in the case of Fiat.

Vikram Kirloskar, President, SIAM said, “Across-the-board implementation of excise duty valuation based on the cost of manufacture had caused a significant amount of concern within the automotive companies as it made it very difficult for the industry to price the products in tune with the market realities and still pay excise duty based on the transaction value. Several representations had been made by SIAM consequent to which the Ministry of Finance has now issued a circular 979/03/2014- CX dated 15th January 2014.”

Kirloskar also said, ‘“SIAM and its member companies are deeply appreciative of the industry- friendly approach of the circular issued which substantially addresses the concerns of the industry. SIAM shall continue the process of sustained dialogue between the industry and the Ministry of Finance to enable a better understanding of the constraints facing the industry with regard to product pricing and to further rationalise and harmonise the tax laws for the automotive industry,” he added.

Fiat was found guilty of tax evasion, and slapped a fine of Rs 400 crore as excise duty. This decade old case revolves around the Uno which Fiat reportedly priced lowerin the market as opposed to its cost of production. As a result, the company paid the excise duty on its valuation and not the cost, it which was later found by the excise department. The Supreme Court ruled that the company has to pay excise duty on its cost which was higher than the selling price, while Fiat argued it should be on selling price. This new ruling will bring a big relief to the Italian company.

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