The domestic automobile industry has asked the Finance Minister to implement a uniform rate of excise on passenger vehicles at 16 per cent in the upcoming Budget, while asking import duty tariffs on vehicles not to be brought down below 12.5 per cent.

In its pre-budget wish list, the Society of Indian Automobile Manufacturers (SIAM) has asked the Finance Ministry to have a uniform rate of excise duty on all passenger vehicles, cars, MPVs and MUVs of 16 per cent.

The SIAM President, Mr Madhur Bajaj, said he hoped that the Government would remove the anomaly of punishing excise duty on utility vehicles and cars, which are not defined as small cars by reducing them to 16 per cent.

"It is unfortunate that such cars have been clubbed with pan masala, the only two products attracting such a rate of duty," he said. He added that the demand was in keeping with the SIAM pre-budget recommendation last year and its post-budget recommendations after Budget 2006.

At present, small cars with petrol engines of capacity up to 1,200 cc and not exceeding 4,000 mm in length, and diesel cars of engine capacity not up to 1,500 cc and not exceeding 4,000 mm in length enjoy a benefit of 8 per cent cut on excise duty announced in the last Budget.

The automobile industry body also said that for completely built units (CBU) of passenger cars, two and three-wheelers, the customs duty should be retained at the current level.

"Tariffs for CBUs of commercial vehicles should be de-linked from other tariffs. Duties should not go below 12.5 per cent," Mr Bajaj said.

The current customs duties in India were amongst the lowest in the world, and hence should not go below 12.5 per cent, SIAM said.

Given the huge investments planned in this sector, continuation of present level of tariffs would promote value addition and manufacture in India, it added.

The industry body also asked the Government to continue the tax incentives on research and development incentives, which expires this March for another 10 years.

SIAM also suggested a one-time incentive-based fleet modernisation programme to be launched during the year.