The high profile meeting between the Indian Finance Minister (FM) and Society of Indian Automobile Manufacturers (SIAM), an apex industry body representing 46 domestic automotive and vehicular engine makers, led to no significant outcome. P. Chidambaram, FM, Government of India, has ruled out the possibility of negating the additional 3 per cent excise duty on Sports Utility Vehicles (SUV), as per the '13 Union Budget. However, the Cabinet Minister affirmed that some developments regarding the indirect taxes will be announced during the debate on this year's Union Budget and Finance Bill in the Parliament.
During the post-budget meeting with SIAM, Chidambaram acknowledged the fact that Indian auto sector is in a dire need of help, because the soaring vehicle finance interest rates are affecting sales and profits. The FM also expressed faith that the Reserve Bank of India (RBI) will cut auto interest rates in the near future, which can be immensely beneficial for the Indian automobile operators. However, ball is in the court of Governor of the RBI, who is the only one capable of making a call in this regard.
Speaking on the upcoming announcements in the indirect taxes levied, Chidambaram was quoted as saying, “We will re-look at all suggestions on indirect taxes and announcements will be made in Parliament. I have all of March to look into all suggestions. We will take decisions and announce them when I reply to debate in Parliament by end of March.”
Expressing his take on the 3 per cent hike in excise duty on SUV models from 27 per cent to 30 per cent, Chidambaram said that dual pricing on diesel at fuel pumps was not feasible. The latest hike could be a way of checking the subsidy on the diesel fuel, on which close to 98 per cent of all SUV models run.
He further added, “Budget making is a continuous process. When I reply to the debate on the Budget, there will be some more announcements and then when we reply to the Finance Bill there will be more announcements. A number of decisions which are in the making, or are in the process of being taken will be announced in Parliament.”