SIAM pleads to Govt. for current excise duty on small cars

2010 was a remarkable year for the Indian automobile industry and it is expected that it would maintain the momentum in 2011. The auto companies in India are looking forward to the new budget wherein they expect to sustain the excise duty in the present rate for the hatchback cars.

Society of Indian Automobile Manufacturers (SIAM ) has requested the Indian government to commission the excise duty on the small car to be 10 per cent which is the current level despite the auto sector enjoying accelerating growth this financial year.

It was being quoted by Dr Pawan Goenka, SIAM's President that the Indian auto industry bestowed the government with 86 per cent more excise duty making a kitty of 26 per cent for the overall excise duty.

As per the report it was mentioned that due to the stimulus package given by the Indian government the auto sector was able to surpass the 2008-09 downfall. On the hatchback car models, the excise duty was reduced from 12 to 8 per cent. Though in the 2010 budget the excise duty was increased to 10 per cent. However, on the sports utility vehicles, multi utility vehicles and big cars at present are levied with 22 per cent of the excise duty.

Goenka made a point when he said that any extra tax on the auto manufacturer will be added to the direct cost of the car which will be borne by the buyers. He is expecting that the excise duty should be maintained to 10 per cent and not 12 per cent as any price contrast or increase in the car will be levied on the consumers.

Report also stated that the car makers met the finance minister of India but he did not ushered anything further. Goenka said that the company had discussed with the Indian government and are expecting a positive outcome from the meeting. The government has promised a fair look at the request.

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