Companies

Ministry bats for excise duty sops for auto sector

Our Bureau New Delhi | Updated on March 12, 2018 Published on February 05, 2015

Investment push Anant Geete, Minister for Heavy Industries and Public Enterprises, with DPE SecretaryKD Tripathi during the SCOPE HR Summit in New Delhi, on Thursday KAMAL NARANG

Companies struggling with poor sales are hoping Govt will roll back hike



The Heavy Industries and Public Enterprises Ministry has called for the restoration of excise duty cuts on automobiles.

“We have suggested continuation of reduced excise rates,” said Anant Geete, Minister of Heavy Industries and Public Enterprises, on the sidelines of SCOPE’s HR Summit on Thursday.

Duty benefits, introduced in last year’s interim budget and subsequently extended, ended on December 31, 2014.

The suggestion has come at a time when the auto industry reported a mixed performance in January — the first month after the duty benefit was withdrawn.

Mixed bag

Key players such as Maruti Suzuki and Hyundai posted single digit growth while GM India, Ford India and Mahindra & Mahindra reported a decline. However, there were exceptions such as Tata Motors, Toyota and Honda Cars India, which registered double-digit growth during the month.

The erstwhile UPA Government had cut excise duty on automobiles and consumer durables in its interim budget in February 2014, as these two sectors were hit hard by the economic downturn. Excise duty on small cars, scooters, motorcycles, and commercial vehicles was reduced to 8 per cent from 12 per cent.

For SUVs, it was cut to 24 per cent from 30 per cent; for mid-sized cars to 20 per cent from 24 per cent and for large cars from 27 per cent to 24 per cent .

In June, the Modi government extended the duty concessions by six months to December 31, 2014. Now, the excise duties are back to the rates that existed before February 2014.

Regarding reforms in the functioning of CPSEs, Geete said that the Centre is expected to take a decision on the Roongta panel’s recommendations soon.

The panel, headed by former SAIL Chairman SK Roongta, had submitted its report during the UPA regime in November 2011. The committee had given as many as 40 suggestions, which include a fixed tenure of 3-5 years for a CPSE Chairman & Managing Director, listing of at least 50 more CPSEs in the next five years, better corporate governance, more autonomy to Boards of PSUs, better utilisation of resources and transparency.

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Published on February 05, 2015
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