Auto components industry body ACMA on Friday said the cut in corporate tax rate and other policy measures announced by the government would give a big impetus to domestic manufacturing and help attract investments in the private sector.
The auto component industry body, whose members account for around 2.3 per cent of country's GDP, said the policy measures announced at the onset of the festive season were expected to infuse positive sentiments in the market.
"Reduction in corporate tax to 22 per cent for existing companies, 15 per cent for new manufacturing companies and relief on account of MAT are steps in the right direction to give manufacturing, investments and economic activity a boost," ACMA President Deepak Jain said in a statement.
Expansion of scope of CSR expenditure to include incubation centres and public funded institutions will also encourage R&D in automotive industry, he added.
The auto component industry also expects that the central government, in consultation with the sates, will also consider ensuring a uniform GST rate of 18 per cent on all auto components.
"Currently, 60 per cent of auto components are (taxed) at 18 per cent, while the rest are at 28 per cent. A lower rate of GST will not only ensure better compliance but also help curb grey operations in the aftermarket," Jain said.
The Automotive Component Manufacturers Association of India (ACMA) comprises of 800 manufacturers who account for more than 90 per cent of the industry's turnover in the organised sector.
The sector reported a turnover of Rs 3,95,902 crore (USD 57.10 billion) in 2018-19.
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