However, the government has given concession for CNG vehicles making it cheaper than petrol and diesel vehicles. According to the proposal, vehicles costing up to Rs 7 lakh, the tax is 7%, while for vehicles costing between Rs 7 lakh and Rs 20 lakh, it is 8%, and for vehicles above Rs 20 lakh, it is 9%.
State Finance Minister and Deputy Chief Minister Ajit Pawar said, “The new tax rate will be 5% for CNG vehicles costing up to Rs 10 lakh, 6% for vehicles costing between Rs 10 lakh and Rs 20 lakh and 7% for above Rs 20 lakh. Though sales tax targets have been exceeded this year, excise collection has not shown a similar trend. Keeping in mind some factors that have been responsible for lesser recovery of taxes, we have kept the burden of new taxes as low as possible this time.”
Most of the carmakers have already increased prices of their models from Rs 2,000-3 lakh following the tax increase in the Union Budget 2012-13. The government had increased excise duty by two per cent from the current 22% to 27%.