There is expected to be a major price hike across all segments from July 1 onwards, once the deadline for the Excise Duty cut that was introduced in the Interim Budget, in February, expires. A report from ET suggests that the government will return to the previous excise duty regime resulting in a hike in the price of UVs by up to 6 per cent and cars and bikes by up to 5 per cent.
The previous UPA government in the Interim Budget in February had announced that the Excise Duty on the small cars was being reduced to eight per cent from the existing 12 per cent. A similar 4 per cent cut had also been awarded for the large cars with duty coming down to 20 per cent from 24 per cent.
The SUVs however received maximum benefit under the Interim Budget with a six per cent reduction to 24 per cent. This was done to revive an ailing auto sector that had been seeing falling numbers and constant price hikes in just over 1.5 years.
Hoping to avoid a price hike, members of SIAM met with Commerce Minister Nirmala Sitharaman on June 16 to ask for an extension of the deadline in this regard but there has been no word on what the future course of action will be once the deadline expires. Automakers say that they will be left with no option except to hike prices if the extension is not provided.
Source:ET
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