The automobile industry in India has been quite vocal in its demand for lesser tax on SUVs below Rs.10 lacs since the union government levied higher excise duty on all SUVs in the last budget. Now they have received support from an important quarter. Union Heavy Industries and Public Enterprises minister Mr. Praful Patel has backed this demand of the auto companies.
The minister has said that there is certainly a need to relook and reassess the hike in excise duties on all SUVs, since under the Motor Vehicles Act SUVs are classified under various categories. According to him, because of this higher tax regime on all SUVs across the board, sales of cars like Mahindra Bolero and Tata Sumo has been affected which are used to ferry people in the rural areas. He went on to say that he has already taken up the matter with union finance minister Mr. P. Chidambaram and have suggested to him that SUVs which are priced under Rs.10 should have a different tax regime altogether.
He further said that the objective of the higher tax on SUVs should be to tax those people who use high-end cars and not to penalize everyone across the board. Because all these reasons he supports the demand raised by the automotive industry and it merits a reassessment. It must be mentioned in this regard that in the last union budget, the central govt hiked excise duties on all SUVs to 30 percent from the existing 27 percent.