With sales in the automotive sector moving to the greener side, the government thinks that it is about time to lift-off the excise duty benefits being provided to this sector. The government is now planning to stop providing excise duty benefits on car sales beyond 31st December, 2014.
The excise duty benefits which were to expire on June 30, 2014 had already been extended till this month end, but the government is now feeling the pressure to raise revenues and has to pull the plug off these benefits.
The automotive industry is however not very happy with this decision. With a very little or negligible increase in sales performance, increasing costs of the products could result in the potential car buyer backing off once again. This would lead to manufacturers offering higher discounts to attract customers, which would result in lower gains.
A few manufacturers have already announced a price hike across their model range starting from January 1st, 2015; and other manufacturers are expected to follow this route in the coming weeks.
Source – ET Auto