Tuesday, August 02, 2011
By Pranjal Gera
Rise of Excise Duty on cars
The Finance Ministry is considering the hike in excise duty on cars and Tobacco related products as the Government is concerned over the expected shortfall in Tax revenues.
(SIAM)Society of Indian Automobile Manufacturers said that the hike in excise duty by 2% on all car segments is expected. This will result in a hike in the prices of cars.
Excise duty on both the products was not revised this year. According to the Business line, various suggestion have come on amending the excise duty but no final decision have made as the Finance Minister is expected to decide once He is back from U.K. The task is not an easy one as the rate of growth of manufacturing is on decline, any increase in duty affect the demand.
Hyundai Motor India said that hike in excise duty in cars will push their prices up.
General Motors said it will increase the prices of its car models.
India's largest car maker Maruti Suzuki said, its cars would become dearer by 2%.
MSI chairman R.C.Bhargava said that The Finance Minister Pranab Mukherjee announced in the budget the hike in prices of cars is necessary to compensate the increase in excise duty.
Auto companies and component makers are worried any increase in excise duty will be passed on makes the global companies to restrain their investments and fresh hiring.
There are some suggestions, such as increasing the duty on diesel and High end cars. Small petrol cars could be remitted.
Some of the popular hatchback models in the Indian auto market are Chevrolet Beat Diesel, Toyota Etios Liva, Ford Figo, Maruti Swift, Hyundai i10, Chevrolet Beat and Volkswagen Polo. Apart from these popular models, cars going to hit the Indian roads this year are Force One, Maruti Cervo and Honda Brio.
