The Government of India has finally cleared the confusion revolving around completely knocked down kits. The Finance Ministry has clarified the definition of a CKD by saying that individual parts such as an engine and gearbox separately will attract a duty of only 10%, whereas a pre-assembled engine and gearbox will attract a 60% duty. Manufacturers like Skoda, Toyota, Honda and Volkswagen will not be affected at all and can breathe a sigh of relief. However Mercedes, Audi and BMW will have to change the way they import their CKD kits for the C-Class, A4 and 3-Series respectively, as they will face a duty of 60% if they continue to import pre-assembled engine and gearbox in the country.
