The Automotive Component Manufacturers Association (ACMA), India’s leading body representing the auto component sector, has submitted its recommendations for the upcoming Union Budget 2024-25 to the Ministry of Finance and the Ministry of Heavy Industries. ACMA’s proposals aim to strengthen the sector through targeted fiscal incentives and policy reforms.
Among its key recommendations, ACMA has proposed incentivizing capital expenditure by reintroducing an additional investment allowance provision. It also advocates for increasing the depreciation rates on plant and machinery in the auto component industry from 15% to 25%, aiming to spur investment and modernization.
Furthermore, ACMA has urged for rationalizing GST rates on Electric Vehicles (EVs) and their components to promote adoption and manufacturing in the electric mobility segment. The association has also sought clarification on tax deductions related to business benefits and perquisites under Section 194R. Additionally, ACMA has recommended an amnesty scheme to resolve legacy disputes under Customs laws, aiming to provide relief and clarity to industry stakeholders.
Commenting on ACMA’s recommendations, Shradha Suri Marwah, President of ACMA and CMD of Subros Ltd, emphasized the importance of a growth-oriented budget with continued focus on reforms and infrastructure development. Marwah highlighted the positive impact of schemes like the Production Linked Incentive (PLI) on the automotive industry, expressing hope for their continuation to support sectoral growth.
ACMA’s proposals underscore its commitment to fostering a conducive policy environment for the auto component sector, anticipating that these measures will contribute to enhancing competitiveness and resilience amid evolving market dynamics.
