Financial Daily from THE HINDU group of publications
Friday, Feb 17, 2006
Financial Daily from THE HINDU group of publications Friday, Feb 17, 2006 |
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Industry & Economy
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Budget Car prices may not come down after Budget Neha Kaushik
New Delhi , Feb. 15 CONSUMERS expecting a significant decline in car prices following this year's Union Budget may be in for a disappointment. While there has been considerable speculation that the Finance Ministry may decrease the excise slab on passenger cars from 24 per cent to 16 per cent or provide a special excise concession of 8 per cent for small cars, sources point out that this seems unlikely this year as concerns have been expressed over the likely repercussions on revenues if excise duty is reduced. Sources added that at the most the excise slab may be reduced to 20 per cent, but a reduction of 4 per cent was unlikely to have a significant impact on vehicle prices. A reduction of 8 per cent in excise duty would have translated into a Rs 10,000- Rs 20,000 decrease in the price of an entry level car. The domestic automobile industry has been lobbying with the Government to bring down the excise levies on all passenger vehicles as the decision on lower excise duty on passenger vehicles was deferred in the last Budget. A reduction in excise slabs would also help carmakers to offset the growing cost pressures as a result of increasing prices of key inputs. Anticipation about a possible reduction in excise duty on passenger cars had increased after the Finance Minister, while addressing the annual convention of the Society of Indian Automobile Manufacturers (SIAM) last year, said that he intends to promote India as a regional hub for small car manufacturing and this could translate into lower taxes. The last excise concession on passenger cars was given in 2003-04 when the excise slab was decreased from 32 per cent to 24 per cent.
More Stories on : Budget | Cars
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