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. SIAM would like to point out that in the Auto Policy 2002, under Excise Duty (Section 9), along with small cars (Sub Section 9.1), MUVs (Sub Section 9.2) were also identified for fiscal incentives.

2. Excise duty on two & three wheelers should be reduced to 8%

3. Excise duty on LPG/ CNG, Hybrid and other alternative fuel vehicles should be reduced

4. 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%.

5. Rate of excise duty for Motor vehicles for transport of goods fitted with petrol engine should be 16%.

6. Reduction in rate of duty for factory built ambulances to 16%.

7. NCCD to be abolished.

1. MRP Based Levy On Automobile Parts & Components: Abatement percentage of 33.5% on parts & components to be increased to 55%.

2. 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.

3. 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.

4. Incentive for conversion to cleaner technologies/ Alternative Fuel -CNG/LPG

5. 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/-.

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%.

2. The Basic Customs Duty on Passenger Cars and MUVs, Passenger 3-Wheelers (8703) should be kept at the existing Rates of 60 % and 100 % for new and used vehicles respectively.

3. The Basic Customs Duty on Two Wheelers & Goods Three Wheelers (8711) should be kept at the existing Rates of 60 % and 100 % for new and used vehicles respectively.

4. Project imports under Heading 98.01 of Customs Tariff Act, 1975, rate of duty should be reduced from 10 to 5%.

5. Duty on alloy steel & primary & secondary ferrous metals should be brought down to 5%.

6. Basic rate of duty for steel to be rationalized and brought down to 5%

7. Duties on Dies & Moulds falling under chapters 82, 84, 85 and 90 to be brought down to 5%

8. Duties on Safety Seat Belt (8708.21), Air Bag, Anti Lock Breaking System (8708.99) to be brought down to 5%.

9. Duty on CNG kit to be nil.

10. Items imported for R&D of Automobile sector should be considered at par with R&D of Educational institutions/ Bio-Tech/ pharmaceuticals, and the benefit of Nil rate of duty should be extended.

11. Duties on components of electric & hybrid vehicles to be brought down to 5%.

1. Introduce GST as per the roadmap.

2. CST to be abolished.

3. It is suggested that an appropriate procedure/form etc. should be introduced for exempting goods from levy of CST, which is to be used in manufacture of products to be exported.

4. All states to be brought under VAT.

1. Weighted Tax Deduction: In order to continue to encourage the research & development activities and also to enable the companies to compete globally, it is suggested that this incentive available for research & development expenditure incurred should be extended for a further period of 10 years..

2. The withholding tax u/s 194I @ 22.44% should be abolished since a significant component withheld is the capital recovery which is not correct as it is not income. .

3. Income Tax: A deduction similar to Housing loan should be granted for the car loans as this will lead to a growth in the passenger car segment and will generate higher revenue to the government in terms of Excise duty and sales tax.

1. Depreciation Rate on Plant & Machinery to be increased from 15% to 25%.

2. Motor Vehicle Depreciation to be raised from 15% to 25%.

1. Reasonable Lead time to be given for introduction of proposed changes in Budget. Any new levy and mechanism should be notified early.

2. Wealth tax should be abolished.

3. Either the tax should be kept at a totalled single rate or the imposition/change in any tax structure should be done in consultation with representatives of the software industry like SAP, Oracle, etc.

4. Extension of advance ruling facility for large tax payer units under LTU jurisdiction or companies paying more than Rs 5 crore taxes.

5. Steps are needed to encourage investment. The Automobile industry should be brought under purview of existing incentive structure.

6. Need to Promote & Encourage Exports

7. Need vehicle fleet modernisation programme.