In the latest fiscal budget for 2023-24, the car parts sector seems to have been neglected once again, which could have negative implications. The official budget documentation reveals that the government has imposed a significant customs duty (CD) rate on the import of various car components. This development raises concerns about the potential impact on car prices and the difficulties faced by parts importers.
According to the details provided in the budget 2023-24 document, a 35% customs duty rate has been enforced for the import of car components. Surprisingly, this rate applies uniformly to all car parts, irrespective of their complexity or significance in the overall functioning of the vehicle. This blanket imposition of customs duty fails to acknowledge the varying roles and importance of different car parts.
Customs Duty of 35% Levied on These Car Parts
Let’s explore the car parts affected by this customs duty and comprehend their significance in the overall makeup of a vehicle. These parts play pivotal roles in ensuring safety, comfort, performance, and functionality.
- Protective strips: These serve as crucial safety features, absorbing impacts and minimizing damage during collisions.
- Luggage compartments: Essential for storage, allowing drivers and passengers to transport belongings securely.
- Interior panels and padding: Contribute to the overall aesthetics and provide comfort to occupants.
- Water and air hoses and channels: Integral to the proper functioning of various vehicle systems.
- Bumper and impact braces: Help protect the vehicle’s structure during accidents.
- Spare tires and parts thereof: Ensure preparedness for unforeseen tire failures or damages.
- Bodywork: Forms the external structure of the vehicle, providing strength and protection.
- Mounts, clamps, dampeners, and other fitment components: Essential for secure installation and stability.
- Engine and transmission assembly: Powertrain components crucial for vehicle propulsion.
- Suspension and brake components: Contribute to smooth rides and safe stopping distances.
- Wheels and tires: Essential for vehicle mobility and traction.
- Exhaust system: Plays a significant role in emissions control, ensuring compliance with environmental regulations.
- Electrical components: Essential for various functionalities like lighting, communication systems, and entertainment.
While these car parts hold immense importance, the imposition of high customs duties on them presents challenges for controlling and reducing car prices. Manufacturers find it increasingly difficult to maintain affordable prices when essential components are subjected to such substantial duties. Consequently, this could have an adverse effect on consumers and potential buyers seeking reasonably priced vehicles.