In less than 24 hours, the Finance Minister Pranab Mukherjee will disclose the budget for 2010-11 and fingers are already crossed on what that in famous 'suitcase' will contain. Industry experts and consumers alike are waiting with bated breath to know what's in store for them for the oncoming year.
The Indian auto industry which had shown resilience to the global slowdown in now expecting the finance minister to dole out some goodies that will set the sector boom.
The industry is praying that the stimulus packages roled during the slowdown year shouldn't be taken back, as it is, there has already been an increase in Cenvat rate for excise duty by two per cent, an indication that stimulus packgaes might rolled back.
There is also a strong lobby to reduce the Custom Duty rates in line with the Wto Agreement. Reduction or rationalisation in VAT ensuring uniform VAT law and procedures is another demand from the auto industry.
Few other essential packages for the auto industry that the industry feels should be provided to them are:
a) Continue export sops and extend the 2 per cent interest subsidy given to exporters on rupee export credit from March 31 to December 2010 in order to help auto exports sustain growth and stabilise it at 15 to 20 per cent.
b) Sales tax incentives should be continued under VAT regime.
c) Set-off of VAT paid should be allowed for all inputs including raw material, components, consumables, fuel and capital goods and services.
d) Embedded tax of 12 per cent makes vehicles manufactured in India less competitive in the international markets, so any export incentive scheme offered to exporters should factor this in the total value of credit.
