Tax on SUVs below Rs 10 lakh Should be Reconsidered, says Praful Patel

This year's union budget that imposed higher excise duty on all SUVs, faced criticism by the Indian automobile industry due to taxing even the SUVs priced below Rs 10 lakh. And the automobile industry has been demanding to keep the below Rs 10 lakh SUVs exempted from the SUV- Tax, and now the Heavy industries and public enterprises minister Praful Patel have favoured the demand.

Speaking in favour of the automobile industry's demand for re-assessing the hike of excise duty to 30 per cent from 27 per cent earlier on SUVs, Mr. Praful Patel said, "I certainly feel there is a need to look at the excise duty on SUV. To begin with, there is no classification of SUV the Motor Vehicles Act."

He further said that the SUV tax has affected vehicles like "Sumo and Bolero, which are used in rural areas to transport people." He also said that he has already taken up the matter to finance minister P Chidambaram, and "suggested that any vehicle below Rs 10 lakh may be brought out of the definition."

He then said that the objective should be to "disincentivise people who use high end cars" and for them "not to be subsidised by cheap diesel." Justifying the demand raised by automobile industry to bring down the tax on SUVs he said that the Industry has "merit and justification" in seeking a reassessment at the higher tax on SUVs.

Will the govt reconsider and exempt the Sub Rs 10 lakh priced SUV from higher tax, is yet to get clear, so stay tuned to CarDekho for all the latest updates on the same. Cheers!

Source: ET

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