Auto components industry body ACMA has urged the government for a uniform GST rate of 18 percent on all auto parts to curb the impact of counterfeits in the aftermarket operations. In its pre-Budget recommendations, the Automotive Component Manufacturers Association (ACMA) also asked the government to consider the upward vision of RoDTEP (Remission of Duties and Taxes on Export Products) rates as the rate notified for the sector at 1 percent or lower is inadequate to cover the incidence of unrefunded taxes and duties borne on export products.

“The auto component industry, being an intermediary, has recommended for a uniform GST rate of 18 percent on all auto components,” ACMA President Sunjay Kapur said in a statement. The industry has significant aftermarket operations that are plagued by grey operations and counterfeits due to the high 28 percent GST rate, he added. “A moderate rate of 18 percent will not only address this challenge but will also enhance the tax base through better compliance,” Kapur said.

With the focus of the government on the environment, energy security, and vehicular safety, he said it is imperative for the auto components industry to invest in newer technologies and create capacities to meet the growing domestic demand for such products.

“Facilitating investments for capacity building and encouraging R&D and new product development will be steps in the right direction by the government,” Kapur added.

He also welcomed the government’s policy announcements on the production linked incentive (PLI) schemes for ACC (advanced chemistry cell) battery, auto and auto components, and extension of the FAME-2 scheme. These steps were very timely and “will facilitate the Indian automotive sector is becoming integral to global automotive value chains as also staying relevant”, he noted.