Cars, 2-wheelers to get cheaper - Govt. to slash excise duty

After a long, poor run, the Indian automobile industry might just get something to smile about.

In the interim budget for 2014, the Finance Minister, Mr. P. Chidambaram has announced that the Government has proposed to cut excise duties on cars. The move is expected to boost manufacturing and growth.

The excise duty on small cars is being slashed from 12% to 8%. The excise duty on medium-sized cars and large-sized cars will be reduced from 24% to 20% and 27% to 24% respectively. SUVs will now attract an excise duty of 24% instead of 30%. Excise duty on motorcycles and scooters will also be slashed from 12% to 8%. These rates will be reviewed at the time of the budget.

The cut in the excise duty might prove to be a shot in the arm for the automobile industry, which has seen the worst slump in its history. The cut will enable manufacturers to price their cars lower, which will make them more attractive to buyers.