Budget 2015-16: Heavy industry ministry supports for lower excise duty on auto sector

The Heavy Industries and Public Enterprises Ministry has stood in support of restoration of lower excise duty benefits to the automobile industry. Anant Geete, Minister of Heavy Industries and Public Enterprises is strongly of the opinion that the continuation of reduced excise rates will give momentum to the auto industry which is currently facing a slowdown.

The prices of automobiles and automobile products had gone up after the centre decided against the extension of the reduced excise duty rates provided to these sectors beyond December 31 last year. The UPA government, in the Interim Budget presented last February, announced lower excise duties for automobiles until June 30, 2014, as support to the industry which was in the grip of a slowdown. 

The excise duty on small cars, scooters, motorcycles and commercial vehicles was reduced to eight per cent from 12 per cent previously. For SUVs, it was cut to 24 per cent from 30 per cent; for mid-sized cars to 20 per cent from 24 per cent and to 24 per cent for large cars from 27 per cent.

In June 2014, the new government led by Narendra Modi came into existence and extended the excise duty concessions by six months till December 2014. Post December 2014, the excise duties were back to the rate that existed before February 2014.