Team-BHP - Govt earns more on reduced CENVAT on automobiles

I used to wander what is the impact of reduced excise duty on Govt collections. Today the Government released this press statement which clears all our doubts on the so-called anticipated loss to Govt exchequer during slowdown due to reduced CENVAT on automobiles.

Source: PIB

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The domestic car sales have surged to an all time high and exports of cars have also increased in the country. The Society of Indian Automobile manufacturers (SIAM), has made the following data available:-

Year

Domestic Sales (In numbers)

Exports (In Number)

2009-10 (April-October)

823,049

248,277

2010-11 (April-October)

1,105,273

251,159

% Growth

34.29%

1.16%

As per the information received from Department of Revenue, the data on revenue earned as excise duty for motor cars including other motor vehicles (not specifically for cars) during the year 2008-09 and 2009-10 are as under:-

(Rs. in crore)

2008-09

2,416.92

2009-10

3,958.34

The Government with active participation of all stake holders has taken steps for upgrading infrastructure, establishing world class testing, homologation and certification facilities, meeting R&D need, human resource development as well as addressing issues relating to environment and safety concerns. At present since the sector is already doing well, no specific sops are needed.

This information was given by Sh. Arun Yadav, Minister of State for the Ministry of Heavy Industries and Public Enterprises in written reply to a question in Lok Sabha today.

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Quote:

Originally Posted by aparbansal (Post 2145230)

The Government with active participation of all stake holders has taken steps for upgrading infrastructure, establishing world class testing, homologation and certification facilities, meeting R&D need, human resource development as well as addressing issues relating to environment and safety concerns.

The above bold got me thinking; when talking about homologation, I came to know that few countries do not have the homologation process & instead they would agree upon the homologation with some other country.

For instance, a motorcycle that is homologated in UK could be perfectly accepted in India. I'm not sure what all issues might arise due to such policies? Probably one issue that I can think about is, a few models that might not be homologated in UK, but how would they be done here? For which a regular homologation process can be in place? I mean, why duplicate the effort when something is done at much higher standards then us?

Dear fellow BHPian,

Most developed and developing countries have a homologation standard. We cannot truly say whether UK standards are higher or better than India or not. It depends on which category of vehicles we are talking about.

Any vehicle sold in India has to be homologated by either ARAI, Pune or VRDI, Ahmednagar. Vehicles are then subjected to state approvals like STA. Vehicles which are sold as Imported vehicles have to qualify for technical norms equivalent to Indian norms.

For eg. even Japanese emission norms like JP05 are less stringent than BS-IV. But these are considered equivalent in Australia, Singapore etc but not in India.

As per my knowledge, India has got one of the strictest norms for Two-Wheelers in the world and that is one of the reasons why Harley was not in India for a long time.

AB