Even in the latest fiscal budget 2023-24, it appears that the car parts sector has been overlooked once again. The official budget document reveals that the government has imposed a significant customs duty (CD) rate on the import of various car components. This move raises concerns about the potential impact on car prices and the challenges faced by parts importers.
According to the details outlined in the budget 2023-24 document, a 35% customs duty rate has been set for the import of car components. Surprisingly, this rate applies uniformly to all car parts, regardless of their complexity or importance in the overall functioning of the vehicle. This blanket imposition of customs duty fails to consider the varying roles and significance of different car parts.
Let’s delve into the car parts affected by this customs duty and understand their importance in the overall composition of a vehicle. These parts play crucial roles in ensuring safety, comfort, performance, and functionality.
Protective strips
Luggage compartments
Interior panels and padding
Water and air hoses and channels
Bumper and impact braces
Spare tires and parts thereof
Bodywork
Mounts, clamps, dampeners, and other fitment components
Engine and transmission assembly
Suspension and brake components
Wheels and tires
Exhaust system
Electrical components
Protective strips, for example, serve as vital safety features by absorbing impacts and minimizing damage during collisions. Luggage compartments are essential for storage, enabling drivers and passengers to transport their belongings safely. Interior panels and padding contribute to the overall aesthetics and provide comfort to occupants. Water and air hoses and channels are integral to the proper functioning of various systems within the vehicle.
The exhaust system plays a significant role in emissions control, ensuring that the vehicle meets environmental regulations. Electrical components are essential for various functionalities such as lighting, communication systems, and entertainment.
While these car parts hold immense importance, the imposition of a high customs duty on them poses challenges for car price control and reduction. It becomes increasingly difficult for manufacturers to maintain affordable prices when essential components are subject to such substantial duties. Consequently, this could have an adverse effect on consumers and potential buyers looking for reasonably priced vehicles.
