India’s Auto Parts Industry Lobbies for Flat Tax Rate

Auto parts suppliers in India are asking the government for a single 18% tax rate across sectors where the levy currently ranges between 18% and 40%.

India’s Automotive Component Manufacturers Assn. argues that a flat tax rate would expand the sector’s tax base by reducing the country’s flourishing gray market for aftermarket parts, The Economic Times reports.

ACMA also is pushing for a fund to support India-based research by the industry. And it urges a “technology agnostic” government policy to bolster India’s ability to meet its goal of embracing electric mobility.

Last summer India reformed its complex system of cascading central and state government taxes by replacing it with a single set of goods and services taxes. Under the GST, most cars are taxed at 28%, although the levy for some luxury models can be as great as 53% of the retail price.

ACMA reports that sales by India’s vehicle components industry grew 18% to 3.5 trillion rupees ($51.2 billion) in the fiscal year ended March 31.