Heavy Ind ministry bats for lower excise on auto sector

The Heavy Industries and Public Enterprises Ministry wants restoration of lower excise duty benefits to the automobile industry that had been withdrawn at the end of December.
"We have suggested for the continuation (of reduced excise rates)," Minister of Heavy Industries and Public Enterprises Anant Geete said.
He was replying to a query whether his ministry has proposed to the Finance Minister to extend the excise duty benefits to the auto industry in the forthcoming Budget.
The auto industry wants the government to extend the reduced excise rate. The prices of automobiles and consumer durables had gone up after the government decided not to extend the reduced excise duty rates provided to these sectors beyond December 31 last year.

The previous UPA government, in order to boost the two sectors that were struggling in the wake of economic downturn, had cut excise duty on cars, SUVs, two-wheelers and consumer durables in the interim Budget in February.
Excise duty on small cars, scooters, motorcycles and commercial vehicles was reduced to 8 per cent from 12 per cent previously. For SUVs, it was cut to 24 per cent from 30 per cent; for mid-sized cars to 20 per cent from 24 per cent and to 24 percent for large cars from 27 per cent.

In June, the new government led by Prime Minister Narendra Modi extended the excise duty concessions by 6 months to December 31.

Now, the excise duties are back to the rates that existed before February 2014.
The withdrawal of excise duty had an impact on sales in January with main players Maruti Suzuki and Hyundai posting single digit growth in January, while others like GM India and Ford and Mahindra and Mahindra saw decline in sales.
Tata Motors, Toyota and Honda Cars India were, however, exceptions posting healthy double-digit growth rates during the month.