 "Auto prices set to fall after Chidambaram bonanza")
The interim budget tabled today in the parliament by Finance Minister P Chidambaram ushered in good news for the struggling auto sector.
Excise duties on compact cars, two-wheelers, sports utility vehicles, large and mid-sized cars and small commercial vehicles were slashed to the same levels as six years ago.
In all likelihood the benefit will be passed on to the customers. The proposed cut will remain in effect until the end of June, until the general elections.
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Compact cars, which are under four meter in length, will now be charged at eight% excise duty as against 12% earlier. Motorcycles, scooter and small commercial vehicles will also be charged at the same rate.
SUVs which were slapped with an additional three% duty in the last year's budget, have seen the steepest cut in excise duty. They would thus be charged at 24% excise duty as against 30% presently.
Mid-segment and large sedans will be carry a excise duty of 20 and 24% as compared to 24 and 27%, respectively.
Mid and large sized trucks and buses, which have been impacted the most, have been left disappointed. No excise duty cut was made for the segment.
However, it was proposed to make appropriate reductions in the excise duties on chassis and trailors - The rates can be reviewed at the time of regular Budget.
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