Industry & Economy
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Automobiles
Auto sector relieved with no rollback in duties
Our Bureau
Mumbai, July 6 At one level, the automobile sector has little to complain about the Budget because excise duties have remained untouched when there was some apprehension that there would be a rollback.
The Centre had, as part of its fiscal stimulus package to counter the global slowdown, reduced excise levies from 24 per cent and 12 per cent (on small cars) to 20 per cent and eight per cent, respectively.
Despite this, the industry is a tad disappointed that the ad hoc excise levy imposed on vehicles above 2,000 cc has only been reduced by Rs 5,000 to Rs 15,000 when a complete elimination would have been welcome instead.
“This is neither here nor there,” said Dr Pawan Goenka, President, Automotive Sector, Mahindra & Mahindra.
The silver lining in the cloud, though, is that the other excise levy of Rs 15,000 on vehicles in the 1,500 cc-2,000 cc range will no longer prevail which will benefit this product category and also the end-customer who will pay less in the bargain. The auto sector was also hoping that the differential excise duty between small and larger cars would be bridged but the two-tier structure of 20 per cent and eight per cent remains.
Small cars in
“We would have liked to see something in this direction coupled with some initiatives on scrapping of vehicles and, to that extent, are disappointed,” Dr Goenka added.
It is now clear that the Centre wants to promote greater use of small cars and is keen on India emerging as a key manufacturing hub too.
What had the auto industry slightly perplexed was the announcement relating to reduction in excise duty for petrol-driven vehicles meant for goods transport, from 20 per cent to eight per cent, when diesel is the order of the day for this segment.
It now emerges that Maruti-Suzuki’s Omni Cargo and small numbers of the Tata Ace (which has a petrol option) qualify for this reduction.
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