[TusharK]

Automakers will no longer have to pay a heavy customs duty on cars imported for testing in India.



Heavy Industries minister Mahendra Nath Pandey has confirmed that the government has removed the customs duty of 252% levied on cars brought into the country for testing and certification. He also stated that this would attract carmakers from all over the world to use the testing facilities available in the country.

With this, India has become the sixth country to offer testing and certification facilities to foreign cars brought into the country. Currently, the UK, Germany, China, Taiwan and Japan offer similar concessions.

At present, there are four vehicle testing centres operating under the government's National Automotive Testing and R&D Infrastructure Project (NATRIP). These include iCAT in Manesar, ARAI in Pune, GARC in Oragadam and NATRAX in Pithampur.

Source: ET Auto

Link to Team-BHP News

[Cresterk]

Is this only for cars that are used for certification purposes or for all cars of the same model which are imported into the country later? It’s kind of insane they they were charging 250%+ taxes just to test a car.

[audioholic]

Didn't make sense anyway for me since the duty amount would have been refunded if the car was sent back to the port of origin. Its high time these senseless rules are abolished and industry made more friendlier to run. I personally know how much of a bureaucratic mess it is to import a test car and then again return it. Hence if these rules are eased it will ensure better use of all the test facilities and offshore development centers that are present across the country. Right now unless we use the car for more than a year the logistics costs are not justified. If there is an ease of import and export, manufacturers can ship test cars for short term test campaigns spanning a few days or weeks and yet benefit vastly with development costs.

Hope they also make special registration plates for these cars apart from the TC and TR plates and inform cops not to unnecessarily flag down and harass the drivers asking for documents which they themselves aren't aware of.

[GTO]

I just hope that manufacturers don't twist this rule, like how they keep running red plate cars for multiple years & thousands of km (Mumbai Police are confiscating media test-drive cars running on red (temp) number plates). Ideally, these duty-exempt CBUs should leave the country once the testing is done, or their duty should be paid if put into other uses (events, media test-drives etc.).

Else, I foresee a big CBU fleet coming our way for reviewing !

[RedTerrano]

Experts can weigh in, but I think there will be a predefined finite number of cars required for testing and certification, which is carried out as per the ISO(?) protocols.

Common sense dictates, there will be non destructive (e.g. mileage, NVH etc) as well as destructive (e.g. crash) tests involved.

The non destructed vehicles can be sent back and customs duty reclaimed, but I suspect that cannot be the case with totalled vehicles.
On a related note, does anyone know for sure this actually happens? Might make sense to use a carnet instead. Anyway, though the 252% sounds steep, for a vehicle manufacturer, it should be loose change.

It is encouraging to see this customs duty waived off. In the cut throat competitive world of today, perhaps will attract more customers.
We have had BPO and call centers and outsourced businesses. Why not testing and certification?

[condor]

What are these cars brought in for ? And what happens to them after the testing ?

I dont think these are the same as CBU's - or are these included in this category ?

[Jhinchak]

If companies are actually serious about launching a new car here, They will import it irrespective of the duty to test it. The government is just loosing additional revenue now. If they just want to test it here for other markets, it makes no sense testing here as all the big car company nations have a testing facilities of their own or at the very least by a neighboring country.

[pedrolourenco]

Originally Posted by Jhinchak

If companies are actually serious about launching a new car here, They will import it irrespective of the duty to test it. The government is just loosing additional revenue now. If they just want to test it here for other markets, it makes no sense testing here as all the big car company nations have a testing facilities of their own or at the very least by a neighboring country.

As per the below post India has Test facilities which I assume are under utilised. In this case if India can offer competitive rates, manufacturers can send cars for testing even if they don't plan to launch them here.

Originally Posted by TusharK

With this, India has become the sixth country to offer testing and certification facilities to foreign cars brought into the country. Currently, the UK, Germany, China, Taiwan and Japan offer similar concessions.

At present, there are four vehicle testing centres operating under the government's National Automotive Testing and R&D Infrastructure Project (NATRIP). These include iCAT in Manesar, ARAI in Pune, GARC in Oragadam and NATRAX in Pithampur.

[audioholic]

Originally Posted by Jhinchak

If companies are actually serious about launching a new car here, If they just want to test it here for other markets, it makes no sense testing here as all the big car company nations have a testing facilities of their own or at the very least by a neighboring country.

This scheme has got nothing to do with the local market and launches. It is rather a move to support the automotive industry and give a boost to automotive testing not only for Indian but for the global market. Regarding testing facilities, NATRIP Indore is a huge investment and we might have less than ten such facilities of similar nature across the world. Similar to this there is a test facility called Applus Idiada in Spain. Comparing the cost of shipping ten cars and around 50 engineers for two weeks to Spain compared to bringing them to India to Natrip, it works out to be lot cheaper. Even M&M once used to send cars and staff to Spain. Now if logistics and customs processes are made simpler, manufacturers might consider coming here to be a more viable option.

Originally Posted by RedTerrano

Experts can weigh in, but I think there will be a predefined finite number of cars required for testing and certification, which is carried out as per the ISO(?) protocols.

We have had BPO and call centers and outsourced businesses. Why not testing and certification?

Exactly, this opens up new avenues for automotive testing and will allow some employment opportunities for test drivers, automotive testing companies etc who can take up validation activities for OEMs. Doesnt matter if the car is meant to be sold here or not since the test facilities cater to global environmental needs and not just India specific testing.

Originally Posted by condor

What are these cars brought in for ? And what happens to them after the testing ?

I dont think these are the same as CBU's - or are these included in this category ?

They are test cars imported by R&D centers for various vehicle level testing activities. They are sent back to the parent company or OEM in case of a supplier. So far yes they were being treated as CBUs meant for sale in the local market, and hence this duty was refunded if the car wasnt sold here and sent back to the origin location. But now thats what is being changed.

[Jhinchak]

Originally Posted by pedrolourenco

As per the below post India has Test facilities which I assume are under utilised. In this case if India can offer competitive rates, manufacturers can send cars for testing even if they don't plan to launch them here.

While I agree, we might offer more competitive rates, but all price advantages will be lost through shipping and insurance costs along with other hassles of transporting to a distant nation, especially if they have a testing facility in their home nation.

[audioholic]

Originally Posted by Jhinchak

While I agree, we might offer more competitive rates, but all price advantages will be lost through shipping and insurance costs along with other hassles of transporting to a distant nation, especially if they have a testing facility in their home nation.

Logistics of 20 engineers travelling from Asian countries to EU is more expensive compared to shipping 1-2 cars to India from personal experience. Just the flight tickets will be 20L which is typically the logistics cost of importing and exporting a car via sea. And there is immense product development happening in companies like Bosch, Continental, Delphi(Aptiv), ZF etc out of India and travel happening for vehicle related activities. Bad news for engineers and good news for companies. This might not affect big players much like Mercedes-Benz(with their own best in class test facility right in Germany, BMW etc but for the smaller companies.

[AutoDowntowner]

I am still in shock to see the duty of 252% which was too high. It is a good move by government to remove this duty. This will bring more & more outside cars to India for testing which will also keep our test labs busy. So the more work hours, more income, more jobs too.