Excise duty sop for auto, consumer goods extended to Dec 31
The excise duty on cars, SUVs and two-wheelers as well as consumer durables and capital goods was cut in the Interim Budget in February to help tide over a demand slump.
The concessions, which brought down prices of vehicles and consumer durables, were valid till June 30.
“Considering the present situation in various sectors, the government today has decided to extend the facility of this reduced excise duty to all those sections for a further period of six months, i.e., they will continue till December 31, 2014,” Finance Minister Arun Jaitley told reporters here.
He said the government expects the industry to show positive results in the coming months and hoped “the benefit of these duty concessions will be passed on to the consumers at large”.
Most carmakers and consumer durable firms had already passed on the benefit to customers by cutting prices.
The Finance Ministry said the government extended the duty concession “given its commitment to revive economic growth” and to provide a fillip to the capital goods and automobile sector.
Companies across the two sectors, including Maruti Suzuki, Honda Cars India, General Motors, LG India, Godrej Appliances and Whirlpool, felt the government’s move gives a much-needed stimulus to the industry as it leads up to the festive season.
Excise duty on small cars, scooters, motorcycles and commercial vehicles will continue at 8 per cent from 12 per cent previously and on SUVs it stands at the reduced rate of 24 per cent as against 30 per cent.
The duty on large cars will continue at 24 per cent compared with 27 per cent earlier, while the duty on mid-sized cars will stand at 20 per cent from 24 per cent.