Luxury carmakers to breathe easy as govt clarifies on CKD
The Finance ministry has issued a clarification on Completely Knocked Down definition row. CKD will now include only kits with pre-assembled engine, gearbox, reports CNBC-TV18’s Aakansha Sethi.
The matter has been something that the auto industry has been up in arms against. This latest revision in definition is going to help matters for luxury makers. Car makers like Toyota, Skoda, Volkswagen, BMW, Audi can all heave a sigh of relief since only kits with a pre-assembled engine or gearbox which is imported will qualify as CKD.
In cases where individual components are imported such as an engine or a gearbox, and where there is value addition or indigenization in manufacturing, there will only be a 10% duty and these will not be included in the CKD definition. Only a few models are now likely to come under the Finance Ministry’s CKD definition which will have to pay a 60% duty.
Source:Luxury carmakers to breathe easy as govt clarifies on CKD - CNBC-TV18 -
Ps sorry Vibhor its the same kind of news that you posted if you feel like deleting it please go ahead, sorry once again.
Duty On Assembled Cars Up
Duty on ‘partially’ assembled cars is set to rise from the current 10 percent to a much higher 30 percent. This is due to a change in the definition of what constitutes an assembled (Completely Knocked Down)or imported (Completely Built Unit) car.
The chaos was kicked off by a budget notification which sought to re define what an assembled or CKD car constituted. What it proposed, in essence, was that cars would not be deemed assembled unless sub assemblies like engines and gearboxes were also put together.
This would mean that some expensive cars assembled in India like BMW’s and Audis would leap from a lower taxation level of 10 percent straight to a massive 60 percent; ie the same rate attracted by fully imported cars that rolls off a ship. This obviously caused much confusion.
The finance minister yesterday however rolled back the proposed rate for these ‘partially’ assembled cars to 30 percent. This of course only applies to cars assembled here with fully imported engines and gearboxes. This of course means that the SKD or Semi Knocked Down definition and duty structure could well and truly be back.
As a result, cars like the BMW 3 Series or Audi A4 could on average cost between two to three lakhs more, depending on the model. Mercedes however, who has been assembling engines in India from for years, are likely to escape falling under this definition for both the C Class and the E Class.
Source Duty on assembled cars up | Autocar India