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- Mar 8, 2024
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The automotive sector has been battling a slowdown for most of the last year. The industry has high expectations from Finance Minister Arun Jaitley who is all set to present Budget 2015 this month. Auto industry experts are strongly voicing their opinions in support of excise duty benefits. Global advisory firm, Grant Thorton is also of a similar opinion and backs excise duty cuts to bring the auto industry back on the growth trajectory.
The advisory firm stressed that restoration of excise duty benefits would keep the cost of ownership down for the ultimate owners and also increase the interest for new buyers. Grant Thorton is also of the opinion that reducing excise duty from 12 per cent to 10 per cent or lower will give some relief to the auto component manufacturers which in turn will make exports more competitive.
Grand Thorton is also in favour of more sops to be provided for hybrid vehicles to increase its marketability and usage, which in turn will help to improve environment conditions. This move by the government will also help in bringing down fuel imports, thereby improving the economy of the country, states the firm.
The Budget should also have a policy around scrapping old vehicles which are 15 years old and above, said the advisory firm.
The UPA government had decided on excise duty cuts on cars, SUVs (sports utility vehicles), two-wheelers and consumer durables in the interim Budget 2014 in order to give a boost to the auto industry.
The UPA government had reduced excise duty on small cars, scooters, motorcycles and commercial vehicles from 12 per cent to eight per cent last year. The SUVs received a 30 per cent excise duty benefit as opposed to the 24 per cent; while For SUVs, it was cut to 24 per cent from 30 per cent; for mid-sized cars - 20 per cent from 24 per cent and to 24 per cent for large cars from 27 per cent. The excise duty for the consumer durables sector was reduced from 12 per cent to 10 per cent.
The Modi-led government in June last year, decided to extend the excise duty concessions by six months to December 31, 2014. The auto industry wanted further extension of the duty relaxation, but the NDA government decided against it. Automakers, therefore, hiked the prices of the vehicles as a subsequent result of excise duty rolling back to pre-February levels.
Source: NDTV Profit
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