The previous Government of India had provided a benefit to automobile manufacturers. This comprised of excise duty reduction and other subsidies as well. Almost every automobile manufacturer in India passed on this benefit to their customers.
Now the newly formed Government in India has rolled back the excise benefit from 1st of January, 2015. SIAM is now wanting Arun, Jaitley, Finance Minister of India to implement a reduction in excise duties.
It was noticed that sales of most manufacturers had increased substantially during the previous excise duty reduction. The annual budget will be presented by the Finance Minister soon at the coming budget session. It is most likely that a reduction in excise duty on automobiles will be announced.
In the earlier excise duty reduction, the Government of India had decreased excise duty on SUVs from 30 percent to 24 percent. Mid-sized vehicles experienced a reduction of 20 percent compared to 24 percent earlier.
The Government had also passed excise benefits to large vehicles and reduced excise duties from 27 percent to 24 percent. They also reduced excise duties on commercial vehicles, small car, scooter and motorcycles from 12 percent to eight percent.
Several manufacturers have raised the price of their vehicles. The automobile companies are facing tough times and sales is either stagnant or falling further down. A look at sales in February, 2015 will surely set the tone to whether excise duty reduction need to be implemented or not.