Saturday, March 17, 2012

Automobile Taxation

1. Import Duty on CBUs (Completely Built Units) is 110%.

2. Import duty on CKDs (Completely Knocked Down) is 55%. How do we define a CKD? I am assuming all the parts needed to assemble a car are shipped in a crate and just the assembly takes place in India. What is the rationale behind taxing CKDs at a much lower rate than CBUs? This because the GoI (Government of India) wants to encourage the companies to open up plants in India to assemble cars and generate employment.

3. Excise duty. From what I know, it is 20%. Is it also applied on CBUs and CKDs? I know that cars less than 4m in length AND powered by a petrol engine smaller than 1.2L or a diesel engine smaller than 1.5L have only an 8%. So, as long as you stick to the capacity restrictions, you can turbocharge sypercharge or some other charge, and still pay only 8%, right.

4. On the Road Price include duties such as VAT, Octroi etc. All these vary by state to state.

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