Cars, SUVs and two-wheelers will become expensive from January 1 with the government deciding not to extend the reduced excise duty rates provided to the sector.
“The government is not extending the excise duty concessions on the auto sector,” a senior Finance Ministry official said.
Excise duty was reduced to 24 per cent from 30 per cent in the case of SUVs, 20 per cent for mid-sized car from 24 per cent and 24 per cent for large cars from 27 per cent.
After two successive years of sales slump, the auto industry had shown growth of 10.01 per cent in April-November period this fiscal at 1.33 crore units as against 1.21 crore units in the year-ago period.
Car makers had been asking the government to extend excise duty relief, saying removal of this incentive could push the industry into a negative territory.
Maruti Suzuki India Chairman R.C. Bhargava had said if the incentive is not continued, automobile prices would go up further in the next year.
