Swedish carmaker Volvo today announced an upward revision in prices for most of its models in India by 3 percent. This move comes following the government’s decision to impose additional cess of nearly 4 percent on passenger vehicles in the country in the Union Budget 2016.

However, prices of three of its models – the S60 Kinetic, S60 Momentum and V40 Cross Country D3 Inscription – have been reduced. The cost of the recently launched V60 Cross Country remain unchanged. The entire revision in prices will be put into effect from today, April 1, 2016.

The carmaker attributed the reduction in prices to improvement in efficiencies of scale which have resulted in decline in operating costs.

The V40 Cross Country D3 Inscription is now cheaper by a whopping Rs 3,04,000, the S60 Kinetic by Rs 151,000 and S60 Momentum by Rs 24,000 (All prices ex-showroom, Delhi).

“This year’s budget has forced us to relook at the pricing in order to provide the best in class products to our customers. At the same time, we are pleased to be able to offer significant price reduction on S60 Kinetic, S60 Momentum and V40 Cross Country D3 Inscription variants,” said Tom von Bonsdorff, managing director, Volvo Auto India in a company statement.

Finance minister Arun Jaitley proposed an infrastructure cess of one percent on petrol, LPG, CNG cars under four metres and with engine capacity not exceeding 1,200cc, 2.5 percent on diesel cars under four metres and with engine capacity of less than 1,500cc, and four percent on other higher-engine capacity cars, SUVs and larger sedans. He also proposed an additional one percent tax on purchase of luxury cars priced more than Rs 10 lakh.

Following the announcement, carmakers such as Maruti Suzuki, Hyundai, Mahindra, Mercedes, Chevrolet, Honda and Tata responded by hiking prices of its models.

All prices, ex-showroom, Delhi.