Car makers oppose double standard in excise duty

Major Luxury car makers have opposed the concessional 8% excise duty on small cars. On the other hand bigger cars pay 20% excise duty. Mercedes Benz India and BMW India has raised the issue with the government through the society of Indian Automobile Manufactures’ (Siam). They said that such benefits to small cars on account of length and engine capacity skew the market in favour of small cars. Passenger safety, emission norms and fuel efficiency standards should be the sole criteria for extending lighter duties and not the length of the car. Smaller cars, like Santro and Wagon R, are paying an excise duty of Rs 24,000-Rs 32,000 per unit, while a marginally bigger entry-level sedan, such as the Mahindra Logan and the Ford Ikon, pays a tax of about Rs 1 lakh as it breaches the four-meter length criterion by a small margin.