It should be good times ahead for the automobile industry and car buyers alike. The interim budget released today by Union Finance Minister, Mr.Chidambaram, has special emphasis on excise reduction for the automotive industry.
The new excise rules have cut down the excise duty on the small cars to eight per cent from existing 12 per cent. A similar 4 per cent cut also been awarded for the large cars with duty coming down to 20 per cent from 24 per cent. The SUVs however receive maximum benefit under the interim budget with a six per cent reduction to 24 per cent.
The on-road prices of the cars across the segments will see a cut in the coming weeks. This is a welcome change in government’s stand, as the excise duty levied on vehicles was hiked consecutively in the last two budget meets.
The Society of Indian Automotive Manufacturers (SIAM) has welcomed the excise duty cut on automobiles. Mr Vikram Krloskar, president, SIAM said, “SIAM has welcomed the announcements made by the Finance Minister in the Vote on Account presented today. SIAM would like to thank the Finance Minister for recognizing the need for a more moderate tax structure for the automotive industry and for accepting SIAM's tax related recommendations.”
“We believe that this reduction in Excise Duty would reduce the acquisition price thereby making vehicles more affordable which would improve the consumer sentiment and hopefully revive the demand for vehicles,” Kirloskar added.
“The automotive industry is the engine of growth for the manufacturing sector as a whole as it supports key industries like auto-components, capital goods, raw materials, electronics, chemicals, plastics, software etc. Revived growth in the automotive industry would have significant positive impact on these key downstream and upstream manufacturing sectors that largely depend on the performance of the auto sector. This could hopefully herald a revival of the manufacturing sector in the days to come,” Kirloskar said.
Image courtesy: ET
