SIAM for new VAT system

By Our Staff Reporter

BANGALORE, OCT. 30. The Society of Indian Automobile Manufacturers has commenced dialogues with the Union Committee on VAT and various State governments as part of its proposal to implement a value added tax (VAT) structure which would sustain revenue neutrality instead of revenue escalation.

The VAT policy proposed by SIAM would remove the cascading taxes incurred by automobile components manufacturers levied by various States during inter-State trade.

``The embedded tax system which has been proposed by the Centre is not sufficient to encourage growth of the automotive sector. We have already submitted a four-pronged strategy including a more comprehensive VAT structure to the Government, to converge the Indian automotive industry with its global counterpart," SIAM president, Mr. R. Seshasayee, said.

He was delivering the keynote address to welcome Dr. Werner Muller, Federal Minister of Economics and Technology, Germany, at the facilities of MICO-Bosch in Bangalore today.

The Indian automotive industry has contributed 4.2 per cent to the country's GDP even during recessionary phase over the last three years, with a zero per cent growth rate posted last year.

SIAM has submitted proposals to the Union Government which is on the verge of outlining a new auto policy to augment the growth of the Indian automotive industry.

SIAM's four-pronged strategy involves regulation and implementation of a uniform minimum investment policy both for global and domestic auto manufacturing firms, financial and technology support for research and development in the auto sector especially in telematics and Euro emission norms, reinforcement of legislation to check quality of fuel and safety of transport system, roads in particular, and to increase competitiveness and productivity of the industry to fuel its growth.

Mr. Seshasayee expected the Indian automobile industry to adapt the Euro IV emission standards by 2006-07 for passenger cars, and by 2008 the commercial car segment was expected to adhere to the Euro IV standards.

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