Retention of excise duty cuts by the new FM had raised hopes among auto cos in India. To the respite of auto makers in India, the very first general budget announced by the new Finance Minister, Mr Arun Jaitely includes some of the recommendations given by the automotive sector. The general budget 2014 announced today includes proposal for implementation of the Goods and Service Tax (GST) that had been on wish list of auto makers for long.
Other than this, the auto sector had also demanded rationalization of tax structure, withdrawal of 1 % national calamity contingent duty, acceleration of depreciation rate on motor cars to 25% and inclusion of interest paid on car loans in tax deduction, which have not been included in the 2014-2015 Union Budget.
Announcements made under the Union Budget 2014-2015 including tax exemptions for income up to Rs 2.5 lakh and allotment of Rs 14,389 crore for roads in villages will probably help the auto industry, if not directly then may be indirectly.
This Union Budget 14-15 did not include any announcement regarding the allotment of funds for the National Electric Mobility Mission Plan which implies that fate of electric vehicles in India is yet bleak. Only a few options are available in electric and hybrid segment in India, auto makers offering such products in India were demanding subsidies for the customers buying electric/hybrid vehicles in order to promote sale of green vehicles.
