The 2013-14 Budget has not affected the prices of the small cars and sedans. However, excise duty on the SUVs has been hiked by 3 per cent, along with additional customs on CBUs. The additional tax on SUVs will affect utility car makers like Mahindra, Tata and Toyota the most. SIAM is not very happy about the new tax, as the over-all industry is reeling under pressure and SUVs is the only segment that is doing relatively well.
The new rules state that utility vehicles over four meters in length, with engine capacity over 1500cc and ground clearance more than 170mm will be classified as SUVs. Almost all the premium SUVs fall under this category and will have to hike their prices and might see drop in sale. Renault Duster is a peculiar case, as the petrol version with 1.6-litre engine will be classified as a SUV, while the diesel with 1.5-litre won’t see a price hike.
SIAM is planning to request the finance ministry to consider a roll-back of the additional excise duty on SUVs. "The higher excise duty on SUVs was totally uncalled for. This was the only segment which was showing some growth. We had a post Budget meeting of SIAM members and it was unanimously decided to ask the FM to reconsider the decision. Our concern is that among vehicles in the same price category, one may have to pay the higher excise duty and other may not.” said Pawan Goenka, president, M&M (Automotive and Farm Equipment sectors)
