Union Budget 2013: SUVs and Imported Cars Get Expensive

India's finance minister P Chidambaram announced a hike in excise duty on Sports Utility Vehicles (SUVs) from existing 27% to 30% during his 2013 budget speech. However, the hike won't be applicable on the SUVs registered as taxis, the excise duty for all the cars has remained the same (12%). We have also inspected that this year the govt's focus has been on taxing the rich people, the govt announced to tax 10% as surcharge to the people earning more than Rs 1 crore an year.

The case is no different in automobiles as well, the import duty on completely built units (CBUs) have increased from 75% to 100%, and people interested in buying above 800cc bike will now have to pay 75% import duty from existing 60%. The subsidy benefits for electric cars will however remain the same till 2015.

Commenting on the same, Mr. Ashish Chordia, Chariman, Shreyans (Importer for Ducati, Ferrari and Maserati in India) said, "The increase in import duties on CBU's and bikes over 800cc is indeed going to affect the growth of the automobile industry. A move which provided impetus to the industry, already under pressure, was needed." He further added, "While aspirational products like Ferrari and Ducati may not have an immediate effect on demand, it may slow down the long range plan for India."

This move will surely disappoint the auto industry, which were expecting to get a cut on excise duty on passenger vehicles. And the Indian market which has seen a good growth in SUV segment too might get affected upto an extent due to the increased excise duty.

Share your views on the tax imposed on SUVs and CBU units here