Union Budget revised duty causes Small cars to get expensive

It is nightmare for the auto industry, with excise duty on cars of size and shape to rise. According to the recent revise in excise duty for automobiles, the Union budget set a hike of 2 percent on small cars. This pushes the current excise duty from current 10 percent to 12 percent.

We had made speculations of price hike on C-Segment cars and SUVs, but with the new decision on Union Budget, the revised excise duty will cause the small cars to fetch higher price tag. Regarding the speculated revised duty on diesel, Maruti Suzuki, Honda and Mahindra & Mahindra had already displayed refute and announced their intention of passing the hike in duty to its customers. However, there has been no official announcement from any manufacturers as yet.

Union Budget revised duty causes Small cars to get expensive

According the Union Budget 2012-13, which concluded on 16 March, the excise duty of 22 percent has been raised to 24 percent, causing drastic effect on the prices of sedans, luxury cars, SUVs and MPVs that are longer than 4 meters in length. There has been no announcement on increased duty of diesel cars for the Union budget 2012-13.

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