Budget 2013: SUVs, imported vehicles to cost more
Quotes
 

 

HomeNewsBudget ImpactExclusiveTaxRail Budget Celeb Speak Eco Survey
 

Budget 2013: SUVs, imported vehicles to cost more

Last Updated: Friday, March 1, 2013, 12:46
 
 Comment 0
 
New Delhi: Imported luxury cars will be costlier by up to Rs 15 lakh or even more, while prices of sports utility vehicles will also go up, with the Finance Minister P Chidambaram on Thursday proposing a hike in excise and customs duties on these products.

The move to single out SUVs for additional excise duty was criticised by industry players. Mahindra Group Chairman Anand Mahindra said that the move "destroys a level field".

Major importers of luxury vehicles, including BMW, Mercedes Benz, Audi and Jaguar Land Rover, are tight lipped on their next step, but industry sources said the hike in the customs duty will be passed on to customers.

"This is not a good Budget for the automobile industry. With duty hikes, all manufacturers will pass on the burden to consumers and this will further dampen the ongoing sluggish sales," Toyota Kirloskar Motor (TKM) Deputy Managing Director and COO (Marketing and Commercial) Sandeep Singh said.

If sales fall drastically, people may even lose jobs, particularly at dealers' end, in future, he added.

"TKM will pass on the entire burden to consumers. The excise hike will affect our multi-utility vehicle Innova and SUV Fortuner, while the hike in customs duty will make our Land Cruiser and Prado costlier," Singh said.

Although the company is yet to finalise the exact amount, it will be a hike of Rs 30,000-50,000 for Innova, he added.

"The Fortuner will be costlier by Rs 60,000-75,000. Similarly, Prado's price will go up by Rs 10-12 lakh. We will also raise the price of Land Cruiser by around Rs 15 lakh," Singh said.

Reacting sharply to the proposal to tax the SUVs more, Mahindra tweeted that 'space occupied' was the reason given to levy additional duty, but larger and more luxurious sedans are exempted from its ambit.

"Neither an equitable nor an inclusive rule... No quarrel if at all large cars (are also) taxed. Singling out SUVs destroys a level field. Sad, one has to fight harder to succeed in one's own country," he said.

Excise duty on SUVs has been increased to 30 percent from 27 percent, while all luxury vehicles will attract 100 per cent import duty as against 75 percent earlier. Also, the basic customs duty on motorcycle with engine capacity of 800cc or more is being increased from 60 per cent to 75 percent.

Industry body Society of Indian Automobile Manufacturers (SIAM) taxing higher the SUVs was unexpected and this is the only segment doing well, and hiking prices of these vehicles will dampen sales and impact market sentiments further.

"The increase in customs duty for luxury cars and motorbikes seems to be an effort to raise more revenue and to encourage local manufacturing, value addition and employment. It clearly conveys that India is not ready to accept second hand old vehicles from other countries," SIAM President S Sandilya said.

He also welcomed the proposals to provide Rs 14,873 crore for JNNURM, of which a significant portion will be used for purchasing of up to 10,000 buses, mainly by the hill states.

"Finance Minister has also accepted SIAM recommendation to lower excise duty on CV chassis from 14 percent to 13 percent," Sandilya said.

Country's largest car maker Maruti Suzuki India Chairman R C Bhargava said it is a balanced Budget and the gain for automobile sector will depend on how the proposals are implemented.

Reacting sharply to the proposal to tax the SUVs more, Mahindra tweeted that 'space occupied' was the reason given to levy additional duty, but larger and more luxurious sedans are exempted from its ambit.

"Neither an equitable nor an inclusive rule... No quarrel if at all large cars (are also) taxed. Singling out SUVs destroys a level field. Sad, one has to fight harder to succeed in one's own country," he said.

Excise duty on SUVs has been increased to 30 percent from 27 percent, while all luxury vehicles will attract 100 percent import duty as against 75 percent earlier.

Also, the basic customs duty on motorcycle with engine capacity of 800cc or more is being increased from 60 percent to 75 percent.

Industry body Society of Indian Automobile Manufacturers (SIAM) taxing higher the SUVs was unexpected and this is the only segment doing well, and hiking prices of these vehicles will dampen sales and impact market sentiments further.

"The increase in customs duty for luxury cars and motorbikes seems to be an effort to raise more revenue and to encourage local manufacturing, value addition and employment. It clearly conveys that India is not ready to accept second hand old vehicles from other countries," SIAM President S Sandilya said.

He also welcomed the proposals to provide Rs 14,873 crore for JNNURM, of which a significant portion will be used for purchasing of up to 10,000 buses, mainly by the hill states.

"Finance Minister has also accepted SIAM recommendation to lower excise duty on CV chassis from 14 percent to 13 percent," Sandilya said.

Country's largest car maker Maruti Suzuki India Chairman R C Bhargava said it is a balanced Budget and the gain for automobile sector will depend on how the proposals are implemented.

PTI

First Published: Friday, March 1, 2013, 12:41

Comments


Post your Comments

Name
Place :
Email :  
Comments :  
 
Other Stories
MSME Sector

P Chidambaram proposed continuing non-tax benefits to these units for three years.

Full Article »

IT-BPO Sector

Clarity on tax issues related to R&D centres in IT soon.

Full Article »

Infrastructure

Big push to infra with Rs 50k cr tax-free bonds, two new ports.

Full Article »

Real Estate Sector

FM raised tax deduction limit by Rs 1 lakh for the first time home buyers.

Full Article »

Auto Sector

Excise duty on SUV will be raised to 30 percent from 27 percent.

Full Article »

More »

Latest Videos
Budget 2013: Tax slab remain unchanged Budget 2013: PM commends Chidambaram's budget Union Budget 2013: Chidambaram's Budget speech
Budget 2013: Tax slab remain unchanged Budget 2013: PM commends Chidambaram's budget Union Budget 2013: Chidambaram's Budget speech
rail budget
Rail Minister announced no hike in passenger fares.
know your fm
P Chidambaram- Man of all seasons.
Opinion Poll
How would you see Budget 2013 as?
Pragmatic
Populist
Non-event
 
 
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved