The excise duty cut announced during the interim budget in the month of February by the former Finance Minister P Chidambaram is about to expire on July 1, 2014 hinting at the probable rise in price of cars from next month.
Effective July 1st, the excise duty levied previously on cars prior to the announcement made during the interim budget could be applied on the vehicles. Therefore prices of bikes, cars and UVs are likely to be increased between four to six per cent.
Though there is a catch to it, if the current government notifies before June 30th, the current excise duties levied on vehicles will be retained, but if the government does not notify in that case vehicles will get pricier.
However now, all eyes are set on the new general budget that is likely to be announced in the first week of July. For the growth of the automotive industry in India auto makers are hoping that the new government will show leniency and hence will not increase excise duty on vehicles. In the previous financial year automotive industry witnessed its first drop in sales in the last 10 years as the sales fell by 6.69 per cent.
In FY 2013-2014, automotive sales declined for the second consecutive year with a drop in sales by 4.65 per cent. Auto makers in India are hopeful that Modi government will show leniency towards the automotive sector.
