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        Duty Cut To Make Luxury Cars Cheaper

        Satish Kalepu

        Satish Kalepu

        The government of India has proposed a duty cut on luxury cars. The Ministry of heavy duties has asked the Finance ministry to waive off specific excise duty levied on mid-size and top end cars. If the same is implemented cars like Honda Civic, Maruti SX4 and other popular sedans may become cheaper nearly by Rs. 50,000.

        Currently, there is an additional tax of Rs. 15,000 on cars with 1.5 L -2L engines and Rs. 20,000 on vehicles beyond 2L on ex-factory price. Thus, the actual burden of the tax incurred by the customers is quite higher than the total tax levied. The stated aim of the tax was to discourage people from buying gas-guzzling models like Honda Civic, Toyota Corolla, etc.

        During the FICCI seminar, Surajit Misra, Additional Secretary at the Heavy Industries Ministry, admitted that there is no reason that a specific segment of buyers should be barred from buying these cars as the tax structure is unfair for only a particular segment of vehicle.