Automobile industry body Society of Indian Automobile Manufacturers (SIAM), on Friday, said it would ask Finance Minister P. Chidambaram to reconsider the decision to impose extra excise duty on sports utility vehicles (SUVs), while stating that the definition used to define the category had led to a lot of ambiguity.

“The higher excise duty on SUVs was totally uncalled for. This was the only segment which was showing some growth. We had a post-Budget meeting of SIAM members, and it was unanimously decided to ask the FM to reconsider the decision,” Mahindra & Mahindra President (Automotive and Farm Equipment Sectors) Pawan Goenka, who is also the ex-President of SIAM, told PTI.

SIAM said the industry did not expect the rise in excise duty on SUVs used as personal vehicles and hiking price of these vehicles would dampen sales and impact market sentiments further. Mr. Goenka further said the definition of SUV, as described in the Budget notification, would lead to a lot of ambiguity.

While presenting the Budget, Mr. Chidambaram had said: “SUVs occupy greater road and parking space and ought to bear a higher tax. I propose to increase the excise duty on SUVs from 27 per cent to 30 per cent. However, the increase will not apply to SUVs registered as taxis.”

On the import duty hike on luxury vehicles, he said the affluent class in India consumed imported luxury goods such as high-end motor vehicles, motorcycles, yachts and similar vessels. He expressed confidence that “they will not mind paying a little more”.

To boost manufacturing of environment-friendly vehicles, Mr. Chidambaram proposed to continue and extend the currently available concessions on specified parts of electric and hybrid vehicles till March 31, 2015.

In the budget for 2012-13, the excise duty on specified parts of hybrid vehicles was reduced to 6 per cent from 10 per cent. — PTI