To the much relief of the automotive industry, Finance Minister P. Chidambaram has announced the interim budget, wherein it was clear that car prices are going to come down with the excise duty cuts. The whole automotive industry including the auto component manufacturers will get the much needed boost to reach out to more customers.
The changes in excise duty for cars- (segment-wise)
- Small -8% from 12%
- Mid-sized-20% from 24%
- Large-24% from 27%
- SUVs- 24% from 30%
SUV segment will be benefitting the most, considering it is the most heavily taxed segment and will have a steep drop of six percent.
The Auto Industry has had some tough times recently during the ongoing slump. Now I’m going to quote what the famous auto magazine, ‘Car India’ said- “Automotive Industry is the backbone of growth for the manufacturing sector, so its revival would support key industries like auto components, capital goods, raw materials, electronics, chemicals, plastics and software. The reduction in excise duty would lower acquisition price thereby making vehicles more affordable”
How will customers benefit?
- Encouraging for the customers who buy cars at the end of the financial year
- Reduced prices open up the possibility of buyers to go for higher variants of the same car.
Everything sounds smooth, right? Well, not quite…
This reduced excise duty is valid only till 30th June 2014.