Auto components industry seeks uniform 18% GST on all products, says low taxation will lead to better compliance

New Delhi: Auto component industry on Monday sought uniform 18 percent GST across the sector stating that low taxation would lead to better compliance and larger tax base.The industry, which reported a growth of 18.3 percent to Rs 3.45 lakh crore in 2017-18, said the lower tax levy would also help in curtailing flourishing of grey operations in the aftermarket."One of the key demands of the industry has been a uniform 18 percent GST rate across the auto component sector. Currently, 60 percent of the components attract 18 percent GST rate, while the rest 40 percent, the majority of which are two-wheelers, and tractor components attract 28 percent," ACMA President Nirmal Minda told reporters here.Automotive Component Manufacturers Association of India (ACMA) further sought the creation of a fund to support indigenous research and development (R&D) and technology creation in the component industry."There is a critical need for creating a fund to support indigenous R&D and technology creation in the component industry as also for technology acquisition from other parts of the world," he added.[caption id="attachment_3770699" align="alignleft" width="380"]

Representational image. Reuters.[/caption]Besides, it also sought a clear technology agnostic roadmap for the electric mobility in the country."As we prepare for the introduction of electric mobility in the country, a well-defined, technology agnostic roadmap with clear responsibilities of each stakeholder will go a long way in ensuring a smooth rollout as also leading to the creation of a local supply base for the same," Minda said.The industry body also advocated for notification for change in the micro, small and medium enterprises (MSME) definition as that would allow for a larger number of companies to avail government incentives.Commenting on the performance of the auto component industry, ACMA Director General Vinnie Mehta said 2017-18 witnessed an upswing in the overall performance of the vehicle industry, despite it facing several regulatory challenges.The component industry, in tandem, posted an encouraging performance with significant growth of 18.3 percent over the previous fiscal, registering a turnover of Rs 3,45,635 crore ($51.2 billion), he added.Further exports, grew by 23.9 percent in 2017-18 to Rs 90,571 crore ($13.5 billion), he added.The automotive component industry contributes 2.3 percent to India's GDP and has a share of 4 percent in the country's overall exports.