Auto Mission Plan seeks tax holidays to attract mega investments
January, 29th 2007
Prime Minister Manmohan Singh will release the final copy of the Auto Mission Plan 2006-2016 (AMP) on January 29, which envisages an investment of $35-40 billion in the auto industry over the next 10 years.
The Plan prepared by the ministry of heavy industries seeks a host of incentives for the industry to make India a hub for automobiles. The plan asks for tax holidays for automobile sector investments of more than Rs 500 crore. It also proposes tax deductions of 100% on export profits and deduction of 30% of net income for 10 years for new industrial undertakings.
One of the key recommendations of the plan is to introduce goods and services tax (GST) for the auto sector by 2009, when the entire country is expected to roll over into the GST regime. With the introduction of GST, the sector is expected to benefit as it will entail a possible removal of other taxes such as octroi.
On the infrastructure front, the plan proposes upgradation of port capacity to provide greater berthing facilities not only for cars and other four-wheelers but also two-wheelers. The AMP also proposes the development of Mumbai, Chennai and Kolkata as auto hubs.
The AMP also promotes the idea of captive generation plants to meet the growing power needs of the sector, which are expected to triple over the next 10 years from 1,990 mw to 6760 mw in 2015. The minister for heavy industries Santosh Mohan Dev and secretary RC Panda will represent the ministry at the event organised by SIAM and ACMA.