Finance Minister is ready to present the new Union budget and just like others the auto industry also anxiously waits for the same. Heavy Duty Industries minister, Vilasrao Deshmukh, has recommended lowering of excise duty on big passenger cars by more than 8 percent. The government has already reduced the excise duty on small cars with length less than 4 meters by 8 percent in December 2008 but the duty on bigger cars still remains the same at 20 percent.
Society of Indian Automobile Manufacturers has also requested such amendments from the government asking for uniformity of taxation across all segments. According to the minister, the industry needs drastic revival measures like tax sops to increase the sales.
Currently, all big cars not only attract 20 percent excise duty but all cars with capacities of 1.5L to 1.999L attract additional fixed duty of Rs. 15000 and cars with more than 2L engine capacities have fixed duty of Rs. 20,000 levied on them. This makes all big passenger cars quite costly and leaves a wide gap between the two segments of small cars and bigger passenger cars.