Patel Seeks More Time To Comply With New Norms .

Union Heavy Industries and Public Enterprises Minister Praful Patel said his ministry has requested the Union Finance Ministry to give two years’ time to the auto industry to comply with the new import duty norms for completely knocked down (CKD) units.

“We have sent a formal request to the Ministry of Finance with the request from SIAM. The industry is seeking more time to set up facilities to have more indigenisation,” Patel said on the sidelines of an industry function here.

Lobbying hard with the government, industry body Society of Indian Automobile Manufacturers (SIAM) wanted duty reduction or give manufacturers more time to prepare for more localisation of parts such as engines, transmissions and gear-boxes before the new duty is imposed.

“Industry players are asking for two year’s time to implement the new norms. We have forwarded the request to the Union Finance Ministry,” Patel said after unveiling BMW Vision Efficient Dynamics Concept Car that will hit the global market in 2013.

Presenting the Union Budget, 2011-12, Union Finance Minister Pranab Mukherjee had redefined the meaning of CKD units to encourage local production of automobiles.

As a result pre-assembled engines, gearboxes and transmissions were kept out of the ambit of CKD and now attract 30 per cent import duty as against an earlier duty of 10 per cent.

To avoid the higher 30 per cent customs duty on CKD units luxury car maker BMW India has started assembling engines of 3 and 5 Series sedans and sports utility vehicle X1 at its Chennai plant from April

“At this point of time, our CKD operations are fully fulfilling the new regulations. We are paying 10 per cent duty... There will be no price hike,” BMW India President Andreas Schaaf asserted.

“In our engines, about 50 per cent of the assembly is done in India. So it is considered as locally produced,” he said.

Source : expressbuzz.com