The automobile industry is hoping for starting the New Year with renewed rigor and hope, which has been pushed up by the performance indicators of the last year. The industry is not taking any chances to lose the momentum it has gained. On the same note, the consortium of auto manufacturers are putting their weight behind “no change” policy as regards to excise duty for small cars so that the growth which was picked up in the previous year could be sustained.
The auto manufacturing lobby namely SIAM has proposed the government of India not to fidget with the 10% excise duty for small car, despite the phenomenal growth the sector has witnessed during the year. President of SIAM, Dr Pawan Goenka was quoted as saying, that the industry has already contributed 86% excise to the central government over last year levels, which is more than a quarter in the excise pie. He was further seen making a larger point as regards to the stimulus package. He was of the view that the economy is still not functioning to the desired level hence; there was no merit to roll-back the stimulus.
The report also mentioned that as an inherent part of the stimulus package, the excise on small cars was cut down by a flat 4 percent to propel the growth which was seen during the recession of 2008-09. Noteworthy is the fact that the excise duty, during the last year’s budget was increased by 2 per cent, which was based on the performance data of the industry. SUV’s, MUV’s and big cars still attract a hefty 22 % excise duty.
It was further implied, if there was an increase in the level of excise, the same would trickle down to the end consumers, in effect increasing the product prices that will beyond doubt be detrimental towards the growth of the industry as a whole.