Everybody in the market for a new car in India has reason for cheer since Finance Minister P. Chidambaram has just announced the interim general budget in Parliament today. In the budget, the excise duty for all types of vehicles has been reduced by different amounts.
The excise duty for small cars has been lowered to 8% from the current 12%. Medium cars have their excise duty of 24% cut down to 20%. Motorbike and scooter buyers stand to benefit as well due to excise duty of two wheelers being lessened to 8%. The biggest reduction however is for SUVs.
The excise duty for SUVs was 30% until now and this has now been trimmed down to 24%. These rates can be reviewed at the time of the regular budget. What this means is that these benefits will be passed on to the customers in terms of prices being reduced though if the entire excise benefit will be passed on is something which remains to be seen.