Budget evokes mixed response in Automobile Industry

Chennai, Feb 28 (UNI) General Motors company today expressed that the new budget proposal was not in line with the expectation of the automobile sector.

In a statement here The General Motors Managing Director Rajeev Chaba said the automobile industry expected a reduction in the excise duties on motor cars, phase out of CST, elimination of surcharge, and withdrawal of FBT, but had not materialised.

Mr Chaba said "the automobile industry was one of the growth drivers of the economy, as such tax concessions would have provided increased sales, thereby making significant contributions to the Exchequer".

The Budget was encouraging as it would focus on agriculture, irrigation, education and healthcare, he added.

CEO Asia motorworks Anirudh Bhuwalka in a seperate statement, however mentioned that with Mr Chidambaram initiating the process of phasing out Central Sales Tax (CST) with reduction in the CST rate from four percent to three per cent from April, 2007, marking the beginning of the process of a very significant tax reform measure, which is critical for success of VAT.

The automotive industry suffers on account of cascading effect of taxes and multiplicity of taxes at various levels. This process will naturally give a boost to developing a national common market, he said adding reduction in customs duty on metals and excise duty on tyres should help in reducing the cost for the auto industry.

UNI