The auto industry in India has been facing many problems over the last couple of years and there has been no growth in terms of sales, but that could all change very soon. Presenting the Interim Budget 2014 in Parliament, the Finance Minister P Chidambaram on Monday proposed no changes in income tax slabs. However, the excise duty on consumer goods will be decreased, and to give a little relief to the automobile industry the excise duty on cars will be reduced till June 30th of this year.
Small Cars, Motorcycle and Scooters will have excise decreased from 12 % to 8%, while large and mid-segment cars will have their excise duty cut from 27% to 24%, and 24% to 20%, respectively. SUVs will see the biggest drop in excise cuts, which will be a drop from 30% to 24%.
SIAM president Mr. Vikram Kirloskar has welcomed the announcements made by the Finance Minister in the Vote on Account presented today. "SIAM would like to thank the Finance Minister for recognizing the need for a more moderate tax structure for the automotive industry and for accepting SIAM’s tax related recommendations. We believe that this reduction in Excise Duty would reduce the acquisition price thereby making vehicles more affordable, which would improve the consumer sentiment and hopefully revive the demand for vehicles," he said.
Mr. Kirloskar also added, "The Automotive industry is the engine of growth for the manufacturing sector as a whole as it supports key industries like auto-components, capital goods, raw materials, electronics, chemicals, plastics, software etc. Revived growth in the automotive industry would have significant positive impact on these key downstream and upstream manufacturing sectors that largely depend on the performance of the auto sector. This could hopefully herald a revival of the manufacturing sector in the days to come.”
Write your Comment