Thursday, April 04, 2013
By Anil Jangid
SUV Tax on vehicle below Rs 10 lakh could be revised
If recent developments related to SUV tax proposed in the Union Budget are considered, the government will soon be revising its decision to tax SUVs. Heavy industries and public enterprises minister Praful Patel has also favored the cause of the car industry and has supported the demand to reconsider the tax on SUVs. As per reports, the minister has said that the government should consider revising tax on SUVs which are priced below Rs 10 lakh. In a recent statement, the minister has reportedly said that SUVs such as Tata Sumo and Mahindra Bolero are used in the rural areas to transport people and thus not all SUVs are used as personal vehicles only.
Notably, in the Union Budget, the central government has proposed to hike excise duty on big SUVs with high ground clearance from existing 27 percent to 30 percent. This has resulted in the hike in the price of SUVs in India and also some of the upcoming SUV plans went into tantrums. Lately, there were reports that upcoming Ford Ecosport price will also be increased due to the excise duty hike but later Ford had clarified that there the budgetary proposals will have no impact on the price of Ecosport SUV.
If the government goes ahead with it, soon Mahindra, Maruti, GM and other car makers will be giving a hike to the price of their SUVs soon. The burden of the excise duty hike will be transferred on to the customers as the car makers are already undergoing in constrained margins on their cars due to the slow sales. As Mahindra has the most number of SUVs in India, it will be the one that will be most affected due to the hike in prices. Next to it will be Tata that also has a large number of SUVs in place.