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Lower Excise Duty Likely to be on Small Cars

By Motortrend India Staff   |   07 January,2013

The Heavy Industry Minister intends to pitch for lower excise duty on small automobiles in the year 2013-2014 budget sessions. The move will be made to boost the slowing down auto industry in the Indian market. Incentives are likely to be given on replacement of old vehicles as well. A top Ministry official said, “After detailed consultation with industry players and discussion within the ministry, various recommendations have been prepared. All these aim at not only maintaining a healthy growth rate for the industry but also attracting investment.”

Currently, excise duty on personal vehicles range between 12 % - 27 %, with a fixed duty of Rs. 15,000 depending on automobiles’ size and length. The Petroleum Ministry, in June 2012, sought to impose an additional excise duty of Rs 1.7 lakh on compact diesel cars and Rs 2.55 lakh on SUVs. However, a decision is yet not given on this.

To cut the custom duty, the Heavy Industry Ministries is seeking exemption of SS wire cloth strips from the existing 5 percent and upgradation of automotive technologies.

The Ministry also wants support to be given to the National Electric Mobility Mission Plan (NEMMP), which has set a sales target of 6-7 million units of a full range of electric motor cars, along with resultant saving of 2.2-2.5 million tonnes of precious fuel, by 2020.

CNG (compressed natural gas) is one of the cheapest among the four fuels and been promoted in India for energy security and emission reductions.



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