The Union Budget has added more numbers to the price tag of SUVs and high-end vehicles which come in as CBUs to India. Cars which are over 4m in length carrying an engine which is more than 1500 cc in volume and have a ground clearance of over 170mm will be charged higher excise duty. With this the price of SUVs will be increased by Rs 20,000 to Rs 60,000 depending on the cost of the model.
The cars which come into India as CBU (Completely Built Units) have received a hike in import duty. Currently the taxes on import are up to 75 percent which has been raised to 100 percent in 2013 budget. Two wheelers that are powered by engines which are over 800 cc in volume are also affected by import duty hike. For these vehicles the duty has been raised to 75 percent from 60 percent. If the manufacturing company directly passes on this increase to customers, Suzuki Hayabusa 1300 which currently has an ex-showroom price tag of Rs 13.75 lakh in New Delhi will cost Rs 15 lakh.
Responding to the changes in excise duty for SUVs, Mr. Mr. S. Sandilya, President, SIAM had told yesterday that, the industry did not expect the increase in excise duty on SUVs used as personal vehicles. This is the only segment in the industry which has been doing well this year and increasing price of these vehicles would dampen sales and impact market sentiments further.