Carmakers can finally breathe a sigh of relief as finance minister, P Chidambaram slashes excise duties in today’s interim budget. A refreshing change for an industry that’s seen little support from the government for the past two years.
In his speech, the FM announced that the excise duty for small cars, two-wheelers and commercial vehicles will be reduced from 12 percent to 8 percent. While mid-size saloons will see a cut to 20 percent from 24. Coincidentally, SUVs, that were taxed the heaviest last time around, have received the biggest duty cut and will attract 24 percent excise, down 6 percent from 30.
Considering that the carmakers pass on this benefit to the consumers, car and SUV prices are expected to be slashed. If the entire excise savings are passed on to customers, prices could come down by as much as Rs 27,000 for vehicles such as the Toyota Innova and about Rs 8,500 for the likes of the Maruti Swift.