Premium carmaker Audi has said that it is taken aback by the government of India's move to impose additional duty on completely knocked down (CKD) kit imports.
Premium carmaker Audi has said that it is taken aback by the government of India's move to impose additional duty on completely knocked down (CKD) kit imports. The German auto maker said that it is studying its business case for India and working on different scenarios post the duty hike. Audi said it cannot rule out moving out of India if the CKD duty is not rolled back. It however added that it is too early to say what its decision would be. Audi board member Peter Schwarzen-Bauer said, "Till now, there is no clarity on the new CKD norms and we are studying it at the moment. If the definition is changed, then one has to take a business decision.''
The company said a change in regulation overnight will be complicated for the auto industry. The new proposal on CKD imports in the budget has excluded all vehicles with pre-assembled engines and transmissions from availing 10% concessional import duty, in effect making CKD operations to be classified as completely built units, thereby attracting customs duty of 60%. Although the move will hit even domestic firms, luxury carmakers are likely to be affected the most.
According to the government's new definition almost all CKD units would qualify as completely built units, which attract a 60% .