The Telegraph
Sunday , February 16 , 2014
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Hint of vehicle sops

New Delhi, Feb. 15: The finance ministry, worried by falling car and truck sales, may pay heed to the industry ministry’s pleas that excise duties on automobiles be slashed while presenting the interim budget on Monday.

A demand to cut excise on trucks and buses by a third to 8 per cent has been on the industry ministry’s budget wish list.

Heavy vehicle sales have fallen 21 per cent in January this year and this is expected to spur the government into announcing tax cuts and more money under JNURM to buy new public buses for smaller cities.

Rules on compulsory retirement of commercial vehicles within 15 years may be tweaked to allow faster retirement so that manufacturers can sell more cars as well as bring down pollution levels. Diesel powers much of India’s trucks and public transport fleet.

Industry ministry top brass are believed to have met the finance minister on this issue.

North Block appears to be sympathetic towards cutting taxes on vehicles to help spur sales, but officials said as expenses were mounting there could be no dramatic cuts in duties.

In 2009, then finance minister Pranab Mukherjee had cut excise duty by 4 per cent across the board. However, ministry officials said such a broad cut was unlikely in this interim budget, but reductions in excise on cars, which attract 1227 per cent duty, was likely.

However, even here, there are caveats : officials say that diesel-driven utility vehicles are unlikely to get any duty cuts.

A panel deposing before the Supreme Court has recently sought a 30 per cent cess imposed on diesel cars as the panel fears they are adding to the air pollution in the country.