Summary of SIAM Memorandum of Suggestions on Policy Issues

I. CUSTOMS DUTY STRUCTURE

1. The Basic Customs Duty for Commercial Vehicles (8702 & 8704) should be de-linked from other items and pegged at the bound rate i.e. 40%. Duties should not go down below 12.5%.

II. CENTRAL EXCISE DUTY STRUCTURE

1. Excise duty on all passenger vehicles including MUVs should be 16%. Small cars should be defined only on the basis of length. Fuel and engine capacity should not be included in definition. Small cars and MUVs, both were identified for fiscal incentives.
2. Excise duty on two & three wheelers should be reduced to 8%
3. Rate of excise duty for motor vehicles having seating capacity up to 13 persons including driver when registered as maxi-cab (taxi) should be 16%.
4. Rate of excise duty for Motor vehicles for transport of goods fitted with petrol engine should be 16%.
5. Reduction in rate of duty for factory built ambulances to 16%.
6. NCCD to be abolished.
7. MRP Based Levy On Automobile Parts & Components: Abatement percentage of 33.5% on parts & components to be increased to 55%.
8. Multiple levies -Basic Excise Duty, Special Excise Duty, Automobile Cess, NCCD, and Education Cess should be merged into a single rate of Excise Duty. Tax structure to be rationalized.
9. Secondary & Higher Education Cess of 1% should be merged in the existing Education Cess of 2%.
10. Refund to be allowed for Motor vehicles such as MPV and Station wagons with seating capacity below 10 classifiable under chapter heading 87.03 when registered as Taxi.
11. Incentive for conversion to cleaner technologies/ Alternative Fuel -CNG/LPG. Excise duty on LPG/ CNG, Hybrid and other alternative fuel vehicles should be reduced.
12. Anomaly in excise rate structure for small vehicle body building- It is suggested that chassis for vehicles with smaller tonnage (up to 1.5 MTs), (falling under 8706) should not attract the extra imposition of Rs. 10,000/-.