Auto shares dips on buzz of tax on diesel cars

Shares of automobiles companies are under pressure in opening trades on reports that the government may impose a special tax on diesel cars.

Tata Motors, Mahindra and Mahindra and Maruti Suzuki India are down 1-2% on the National Stock Exchange. The CNX Auto index is trading down by around 1% compared to a 0.17% fall in the benchmark index Nifty at 0920 hours.

“The oil ministry has asked the finance ministry to impose additional excise duty on diesel cars and the matter is under consideration," the report suggests quoting a government official.

The government plans to impose additional levies of Rs 170,000 on small diesel cars and Rs 255,000 on medium and large diesel vehicles, added report.