Budget 2013: Prices of SUVs to increase because of increase in excise duty

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March 1, 2013: Prices of SUVs all set to increase by Rs.20,000 to Rs.60,000 because of the announcement of increase in excise duty from 27 per cent to 30 per cent in the Union Budget 2013. The excise duty hike would be affecting SUV’s like Mahindra XUVS00, Toyota Innova and Scorpio. The hike would be affective on high end cars like Aston Martin and Lamborghini also.

This announcement in the Budget 2013 has evoked some sharp criticisms from the automobile industry which is already reeling under slowdown.Some of the comments made by industry stalwarts on this development are Pavan Shetty, Head, Lamborghini India, said “Over the past two years, absolute duties have gone up by over 67%”. Mr. Pawan Goenka, President, Automotive and Farm Equipment Division, Mahindra & Mahindra commented, “While the tax in itself is a concern, what I am perplexed about is the criterion for ground clearance. I fail to understand why a higher ground clearance is a demerit”. Michael Perschke, Head, Audi India commented, “The budge is negative for the auto sector”.

Excise duty hike would be applicable on vehicles that have 1500cc petrol and diesel engines, ground clearance of 170mm and 4 m in length. Finance Minister Mr. Chidambaram has also announced increase in import duties of top end cars and superbikes. The import duty on motorbikes above 800cc has been revised from 60 per cent to 75 per cent and for fully built cars from 75 per cent to 100 per cent.