‘There is no classification for SUVs under the Motor Vehicles Act’

The issue of additional duty on sport utility vehicles (SUVs) should be resolved soon, particularly considering the demand slump in the auto sector, Heavy Industries Minister Prafeul Patel said here on Thursday.

“Well, I am very keen that the issue of the auto industry on excise for SUVs gets resolved because we have massive slowdown and for us the auto industry is very important for our manufacturing GDP and creation of jobs,” Mr. Patel said.

He was talking to reporters on the sideline of the CII annual general meeting here.

Major car makers have reported decline in sales in March, reflecting the continuing demand slump that the auto industry faced in 2012-13. Passenger car sales growth rate plunged to a 12-year low in February, registering a 25.71 per cent decline as high fuel prices, interest rates and low consumer sentiments took a toll.

Earlier, this month, the Minister had written to Finance Minister P. Chidambaram, urging him to withdraw the duty which was announced in the Union Budget 2013-14.

Mr. Patel said, “I personally feel that there is no classification for SUVs in our country, under the Motor Vehicles Act.”

“It is just a common terminology that we call a certain bigger vehicles SUVs, which is fair enough because diesel is still subsidised so people should not get advantage... Most of these vehicles are used by villagers due to poor infrastructure. Therefore, I have made a request that vehicles which are below Rs.10 lakh and are used more commonly by the average people in the rural areas can get advantage,” he added.

The Budget raised the excise duty on SUVs from 27 per cent to 30 per cent, but it will not apply to SUVs registered as taxis.

The industry is of the view that removal of the proposed additional duty would benefit the sector as it is already facing slowdown in the domestic as well as the global markets.

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