SEPT 24: The Federation of Automobile Dealers Associations (FADA), while extending its support to the auto sector, has asked the Centre to cut excise duty on cars and introduce a four-tier customs duty structure.FADA, at its annual general meeting on Saturday, said that a uniform sales tax of 12 per cent as against an average sales tax of 4-6 per cent earlier, had affected sales because prices had risen subsequently. It has strongly called for the introduction of value-added tax (VAT) to replace octroi, toll tax and other local taxes which have "spawned corruption and inefficiency."FADA president Vinay Nevatia told reporters that the auto sector continues to be one of the highest taxed industries as cars still attract an excise duty of 40 per cent. "When air-conditioners carry an excise duty of 32 per cent, why should cars attract a 40 per cent duty?" he asked.Sluggish market conditions continued in August 2000 and pushed car sales down by 8.3 per cent to 53,272 units with auto majors including Maruti Udyog, Fiat, Telco and Honda Siel cars recording negative growth. Maruti Udyog Ltd (MUL) posted a 17.5 per cent sales dip at 31,203 units in August as against 37,840 units in the corresponding month of previous year.Advocating a four-tier customs duty structure for the auto industry, Nevatia said that under this arrangement, the highest import duty will be levied on completely built units (CBUs) and semi-knocked down units. However, CBUs will be placed on the second tier, followed by components and finally, raw materials.Nevatia said that the association was not opposed to the opening up of imports, including that of used vehicles in India. However, he called for an appropriate duty structure so that India does not "become a dumping ground for used/airconditioned vehicles."He demanded that each imported vehicle be certified by a national test agency to meet environmental and safety regulations. Moreover, the importer must give an undertaking on the availability of after sales service and spare parts for at least five years from the date of import.Nevatia said that the non-uniformity in registration procedures followed by different states has led to confusion, corruption and delays. It therefore recommended a uniform procedure and tax structure.Fada office bearer SP Shah said that the organisation has started a dealer academy programme in a bid to change the mindset of dealer-owners and provide training to salesmen.
