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Excise Duty Benefits Extended Till December 2014
The UPA government had introduced a cut in excise duty to boost automobile sales in India. However, it was temporary and the deadline was 30th June, 2014. The Modi led government had earlier in the week announced it would take a decision soon regarding the matter.
The NDA government, along with India's finance minister Arun Jaitley, has decided to extend the excise duty benefits till 31st December, 2014. This is good news for customers as well as manufacturers. The excise duty on vehicles will continue to remain at three percent to six percent for the next six months.
Commenting on reduced excise duty on automobile Vikram Kirloskar, President, SIAM, commented, "We are certain that the extension of the reduced Excise Duty will contribute positively to improve the buyer sentiment and would help in bringing about a sustained recovery in the automotive industry that has been languishing for over two years now."
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He further added, "This will go a long way in bringing back growth, investments in the industry as well as encourage higher employment. On behalf of the entire automotive sector, I would like to thank Government for their very timely and supportive role."
The reduction in excise duty on automobiles was originally the idea of former finance minister of India, P Chidambaram. SUVs will attract 24% excise duty while medium-sized vehicles will be charged between 20% to 24%. Two wheelers and small cars will maintain an 8% excise duty.
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Sunil Rekhi, Chief Financial Officer, Nissan India, told us, "We welcome the Union Government's move to extend the excise duty concession on automobiles for an additional six months. We will continue to pass this benefit to our dealers and customers."
He also said, "However, the recent increase in freight cost, rising fuel prices, high interest rates and the weak monsoon forecast play a dampening effect in the overall economic growth and tough market conditions that is being faced by us."
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