Monday, February 29, 2016
By Kamal Swami
Budget 2016: SUV’s and Cars to get costlier
The budget of Indian government for 2016-17 is out and despite of offering any exemptions to Indian car market, Finance Minister honorable Mr. Arun Jaitely has imposed tax up-to 4% on purchase of cars and SUVs. According to reports the buyers of car priced above Rs. 10 lakh will be required to pay 1% CESS whereas buyers of SUV will be required to pay CESS of 4 percent on purchase of their favorite vehicle. According reports, present the budget for 2016-17 Mr. Jaitely said "1% additional tax will be charged on luxury cars above 10 lakh". Moving ahead he said that 1% infra CESS will be imposed on small petrol cars where 2% of the same on diesel cars.
Industry experts believe this tax of 4% has been levied to promote hybrid cars in Indian car market and protecting environment from pollution of vehicles. The reason given by expert is due to exemption offered by government on electronic and hybrid vehicles and their parts which are going to expire on March 31. It is believed that this decision will definitely affect the car makers manufacturing high power diesel engine. It is assumed that this might even adversely impact the demand of diesel vehicles in Indian car market.
Well along with these proposals prices of LPG and CNG cars is also going to hike with 1% CESS on purchase of these vehicles. According to reports the most affected segment of this proposal is going to be the car makers whose vehicles have been restricted to enter in Delhi and NCR region till March 31, 2016 by the Supreme Court of India.