The Society of Indian Automobile Manufacturers (SIAM) has demanded more R&D incentives in the coming union budget of India. Sugato Sen, Deputy Director General, SIAM, said that as direct tax rates have not been reduced much, this is the need of the hour.
“On the tax side, Union Budget today covers only Customs Duty and Direct Tax as Excise and Service Tax have been subsumed in GST and handled by the GST Council. With respect to customs duty, SIAM has suggested to the Government that for CBU of cars and two-wheelers, rates should remain at the same level. But, for commercial vehicles CBUs, rates should be increased from 25
However, 40 percent rate should not be applicable to CKD and SKD, he added.
“On the direct tax front, SIAM would like to suggest that the weighted deduction of R&D expenses should be brought back to 200 percent as it was before, since the direct tax rates have not been reduced as originally outlined by the Hon’ble Finance Minister while linking the two. R&D incentive is more important for the automobile industry today as we have to invest significant amount of money over the next few years for R&D to meet various emission and safety improvements in India,” he further said.;