“The government must put in place clear long-term policies to support the future travel needs of the sector.”

NEW DELHI: With just a week to go before the 2018-19 budget, there is growing unrest in the auto component industry compared to the NDA and compared to what was expected in the last budget.

In October last year, the Goods and Services Tax (GST) Council discussed a number of Goods and Services Tax (GST)-related issues in its presentation. In particular, small and medium enterprises (SMEs), which account for about 80% of the auto parts industry.

The issue raised the threshold for developing a scheme around the compliance burden for SMEs to Rs 10,000 lakhs from the previous threshold of Rs 750 start lakhs. In addition, the top 200 lakh rupees of company turnover will not be subject to Goods and Services Tax (GST), while the next 3 lakh rupees of turnover will be taxed at a flat rate of 1-2%. In addition, companies with an annual turnover of up to Rs 150 million can also benefit from quarterly returns.

There are still outstanding issues in the SME space. ETAuto interviews Kishore Gupta, Managing Director, PYN Precision Components It is a supplier to Maruti Suzuki India and an SME, which wants to increase the GST rate from the current 28% Further down to 20%. The existing GST rate supports the working capital requirements of the company.

He also advocated for an investment incentive of around 20% depending on the amount of funds available for further growth.

In the early 1980s, the government provided investment subsidies to companies for one year. In 1986, the investment incentive system ended after the first year was converted to 30% depreciation.

Gupta believed that this revival would improve investment and stimulate expansion and modernization activities in the industry.

Minister Arun Jaitley in 2015 According to the annual budget, the entire auto component industry is also working towards reducing the corporate tax rate by 5-25% as promised by the finance ministry.

It is expected that reduction in corporate tax rate will create a favorable environment for business growth. On the other hand, it will help in creating employment opportunities and stimulate investments in the country.

While the main aspiration of Indian businesses is to create more jobs, the electric vehicle policy is raising concerns. India is also looking for R&D concessions as the automotive industry transitions to full electrification by 2030 years.

Reiterating this point, Prabhar Kadapa, CEO and Managing Director, Avtec Limited, called for encouraging large-scale investment to create new jobs.

“We would also like to see positive action in terms of tax rationalization, removal or reduction of concessions. As the automobile industry invests heavily in R&D, the budget must provide incentives to achieve zero emission targets every year by 2030.”

The auto parts industry levies 28% on 70 to 70 to 70 levies 28% on products 18% on the rest Goods and Services Tax (GST). Plus, the fees start at 1% and go up to 15%. These are for simplicity.

As the automotive industry is the weathervane of the economy, exports are an important area to watch. The Indian automotive components industry grew 11.7% in FY 2017, with sales of $435% 100 million and exports up 1%. Imports and exports continue to dominate.

Rohit Saboo, CEO, National Engineering Industries Ltd, called for reduction in tax rates to boost exports.

“The launch of Make in India II is a top priority to boost the growth of the industry.”

Currently, the automotive industry contributes around 7% to India’s GDP. Suresh KV, head of ZF India, said that the automotive components industry is growing at-11.27%, which is higher than the manufacturing sector’s growth rate of-11.27%.

He called for the abolition of the ‘Make in India’ scheme and other board and policy measures aimed at promoting foreign investment to encourage ZF and other multinationals to expand their local manufacturing base and focus more on localization.

“Given the government’s promotion of electric vehicles, we want to allocate substantial funds to develop the infrastructure required for electric vehicles. There should be a framework of tax incentives and subsidies for EV manufacturers. Electric vehicles in India.

Another area that the government is trying to improve is safety. Focusing on safety will help India reduce the accident rate and help the automobile industry and ZF achieve their goal of zero accidents.

As the government prepares to launch ‘Make in India 2.0’, focusing on future sectors such as robotics, genomics, chemical raw materials, and power storage, the upcoming union budget will also have to address the capital requirements and tax framework for these implementations. The industry as a whole is also expected to reduce corporate tax rates and restructure tax incentives.” Suresh explained.

On the other hand, Schaeffler India, a Baroda-based German component manufacturer, believes that India has huge growth potential. Therefore, increased allocation to key infrastructure sectors such as road construction, railroad expansion and upgradation and raw material sectors such as steel and cement is expected to stimulate economic activity and create more jobs.

“It is important for the government to develop clear long-term policies to support future travel demand. We see the transition to electric vehicles as a good step, but we need to look at hybrids as a necessary and feasible intermediate step, such as zero tariffs on electric vehicles. Schaeffler India CEO Dharmesh Arora local R&D investment will facilitate faster adaptation once imported components are stopped.

On the tax front, the roadmap for corporate tax cuts is expected to continue to be implemented to boost industrial growth and investment. In general, the industry is looking to achieve a balanced budget supported by the right monetary policy to create a positive investment environment and promote consumption-driven growth.

The industry has experienced turbulence in the last few years. World. Henkel India expects the 2018-19 budget to consolidate the gains of structural reforms (GST, demonetization).

Henkel claimed that through 2013, the Companies Act required companies to spend an average of 2% per annum three CSR net profits on three Corporate Social Responsibility (CSR) This activity made India a pioneer. However, since there is no tax benefit for CSR expenditure, CSR expenditure has to be added to the computation of taxable income.

There is also a need for a clear amendment to include goodwill clearly in the definition of intangible asset block.

Dividend Distribution Tax (DDT) is also likely to be reduced. In the case of companies, the dividend tax is expected to be simplified, i.e., triple taxation (CIT, dividend tax, and dividend tax borne by the beneficiary).

This tax will also affect the return on dividend investments, especially for foreign investors. Harmonization of tax rates is important to attract more investment in the Indian economy besides reducing tax rates.

To create an ecosystem for innovation, the government has established the Atall Innovation Mission (AIM) and the Niti Aayog Managing Self-Employment and Talent Utilization (SETU) program.

These programs are designed to promote primary innovation by facilitating financial allocations to schools at the primary level. However, at the corporate level, specific tax incentives should be provided to units engaged in contract R&D business to encourage R&D and growth.

Clear and Simple Input Tax Returns Framework Deductions in GST System, IGST Fast Clawback on Export Income and Profit Prohibition Provisions in GST Act clarifies the assessment and tax implications after uploading as well as the rules and provisions for GST Revised Returns. Provisions. Oleksandr Danylenko, Co-Founder, boodmo “Substandard and counterfeit products in the auto parts industry are undermining consumer trust in the entire ecosystem.” India should not be a dumping ground for such components and we request the government to take corrective measures. This leads to artificially low prices for genuine players.

Lastly, to promote entrepreneurship and innovation, the government should allocate funds to organize at least 6 startup festivals every year (as it stands). 2) You can experience domestic and international industries. This will help you understand the various stakeholders of small business. This will also provide great networking opportunities as well as opportunities to introduce and find new venture capitalists and angel investors.