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Government planning a rollback in Excise Duty cuts for automobiles

Government planning a rollback in Excise Duty cuts for automobiles

Snapshot: According to Economic Times, the Government is planning to roll back the excise duty cuts.

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The Congress led UPA Government implemented cuts to the excise duty rates in automobiles, reducing the prices of the vehicles in February, which were further extended by BJP led NDA Government till March 2015. Now if the reports published in a leading daily Economic Times have to be believed, the Government is planning to roll back the excise duty cuts.

The reason cited is that the government is facing a lot of pressure to generate more revenues and cutting the excise benefits will lead to a major share generated towards it as automotive market is one of the largest in India. Though, the auto industry will not be happy with this move and will oppose the move as high excise means high prices and hence low sales, which recently started showing signs of growth.

The current excise duty structure for SUV stands at 24%, which was 30% earlier to the cut, 27% for large cars, which was again 30% before February 2014, 8% for small cars instead of 12% and 20% for mid-size cars instead of 24%. The roll off means that the manufacturers will have to bear the exact same percents as before February 2014.

SIAM, the Society of automotive manufacturers in India, represents all the manufacturers and act as a voice for them. It is expected that the SIAM will push the government to maintain the existing excise duty structure till the next budget is presented in March 2015.

To know more about the latest SIAM meeting, click here!

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