Commercial vehicle sector gets a budget booster

Finance Minister P. Chidambaram, on Thursday, increased the excise duty on sports utility vehicles (SUVs) and imported vehicles, including motorcycles above 800cc capacity, a move that has left the automobile industry fuming.

However, the proposal of the Petroleum and Natural Gas Ministry to impose Rs.80,000 surcharge on diesel SUVs did not find favour with the Finance Ministry.

However, the budget gave a big boost to the commercial vehicle segment, which has been languishing for quite some time. Under the JNNURM scheme, Rs.14,883 has been earmarked and most of it will go for purchase of buses by the State governments. Mr. Chidambaram announced hike in excise duty on SUVs to 30 per cent from 27 per cent, while all luxury vehicles will attract 100 per cent import duty as against 75 per cent earlier. Similarly, the basic customs duty on motorcycle with engine capacity of 800cc or more has been increased from 60 per cent to 75 per cent. The move is likely to make SUVs and imported vehicles far more expensive than their present price. The Finance Minister said he has provided Rs.14,883 crore to purchase around 10,000 buses under the city modernisation scheme. The purchases would be mostly made by hill States, he said. The commercial vehicle sector has faced a sharp slowdown during the recent months and this has come as a major relief to it. Bus sales during the first 10 months of 2012/13 have slipped 4.6 per cent to 36,609 units from 38,382 a year earlier. Sales of mini-buses were little changed flat at close to 39,000 units.

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