Transporters body demand revocation of tyre import ban in upcoming budget

Alleging tyre manufacturing companies to be working under a cartel for keeping the cost of tyres high, the All India Motor Transport Congress (AIMTC) – a lobby group representing approximately 75 lakhs truckers and around 5 lakh private bus operators, has demanded the removal of the restrictions on its imports in the upcoming union budget so as to bring fair competition, resulting in a reduced transportation cost, they claim.

"Tyre is a significant expense of the transport business. Tyre companies in the country have formed a cartel and consumers are being looted. Restrictions on the imports of Tyre and anti-dumping duty should be removed so that fair competition could be maintained and transport cost can be reduced" said Bal Malkit Singh, Chairman- Core Committee, AIMTC. 

AIMTC's demand has reignited the controversy around Competition Commission of India (CCI)'s final order in February last year against five tyre companies, Apollo Tyres, MRF, CEAT, JK Tyre, and Birla Tyres, and their association, Automotive Tyre Manufacturers Association (ATMA), for cartelization by acting in concert to raise the prices of cross ply/bias tyre variants sold by each of them in the replacement market, as well as to limit and control production and supply. The Commission levied penalties of Rs 425.53 crore on Apollo Tyres, Rs 622.09 crore on MRF, Rs 252.16 crore on CEAT, Rs 309.95 crore on JK Tyre, and Rs 178.33 crore on Birla Tyres, in addition to issuing a cease and desist order. ATMA was also fined Rs 0.084 crore. ATMA was also required to disengage and remove itself from collecting wholesale and retail prices through member tyre businesses or otherwise. Tyre manufacturers, on the other hand, refuted the allegations strongly. 

"Restrictions on the imports of Tyre and anti-dumping duty should be removed so that fair competition could be maintained and transport cost can be reduced" says Bal Malkit Singh, Chairman- Core Committee, AIMTC. 

Earlier with the intention to encourage indigenous industries, India had banned the import of tyres since June 2020 and levied anti-dumping duties. 

Secondly, the transporter's body also stated that in respect of various toll routes of National Highway Authority of India (NHAI) where build-operate-transfer (BOT) roads have completed their tenure and Public Funded (PPP) roads have had 100% capital recovery; although toll is being collected at 100% instead of 40%, despite the notified rules. "Study of all toll routes across the country should be done to identify routes where the toll rate should be brought down to 40% and poor road users should be given their due benefit" it added. 

Furthermore, AIMTC is looking for the withdrawal of TDS on transport business, which was first introduced in the 2015 budget. "We hope that applicability of the TDS under Section 194 C and 194 N of the IT Act will be eradicated from the transport business in the upcoming budget as it is not practical and pointless, rather it has become an additional burden on the transport business" Singh added continuing that innumerable memorandums, reasonable arguments to abolish it, agitations have been held since then although in vain. 

Reduction in automotive fuel prices, rationalization in GST on lubricants, spare parts, vehicle insurance amongst others, increase in scrappage age of BS VI vehicles to 25 years from 15 years at present, are the other issues which AIMTC highlighted for change in the upcoming budget.