ET OnlineNEW DELHI: While acknowledging that Finance Minister Arun Jaitley's pre-Budget 2014 decision to extend the excise duty cut on automobiles sector is a welcome step, Pawan Munjal, MD & CEO of Hero Motocorp said, "Excise duty cuts should have been extended till March."
"The need of the hour is a long-term, consistent excise policy," Munjal emphasised. "The auto sector still continues to be sluggish. Sub-normal monsoon is likely to dampen demand in rural areas," Munjal added.
Earlier this week, the government extended the interim excise-duty concessions for automobile manufacturers until December, giving much-needed relief to an industry that is limping back to the positive zone after posting lower sales for two straight years.
The duty cut announced in the interim budget in February would have expired on June 30, and many were expecting vehicle prices to go up as a result. The government has now accepted a key demand of the auto sector by making a decision on the tax relief before it presents the Union Budget next month, a bid aimed at allowing a possible turnaround in the industry.
All major segments like cars, trucks and buses had posted lower sales for the past two years. Two-wheelers were the only segment that posted growth, helped by strong demand for scooters.
Car companies welcomed the move and said it would further aid a recovery after sales rose 3 per cent in May.
Excise duty on small cars, scooters, motorcycles and commercial vehicles was brought down to 8 per cent from the earlier 12 per cent in the interim Budget. Taxes were also reduced on SUVs and large cars to 24 per cent from the highest bracket of 30 per cent. On mid-size sedan, the tax was cut to 20 per cent from the earlier rate of 24 per cent.
(With inputs from ET Bureau)
"The need of the hour is a long-term, consistent excise policy," Munjal emphasised. "The auto sector still continues to be sluggish. Sub-normal monsoon is likely to dampen demand in rural areas," Munjal added.
Earlier this week, the government extended the interim excise-duty concessions for automobile manufacturers until December, giving much-needed relief to an industry that is limping back to the positive zone after posting lower sales for two straight years.
The duty cut announced in the interim budget in February would have expired on June 30, and many were expecting vehicle prices to go up as a result. The government has now accepted a key demand of the auto sector by making a decision on the tax relief before it presents the Union Budget next month, a bid aimed at allowing a possible turnaround in the industry.
All major segments like cars, trucks and buses had posted lower sales for the past two years. Two-wheelers were the only segment that posted growth, helped by strong demand for scooters.
Car companies welcomed the move and said it would further aid a recovery after sales rose 3 per cent in May.
Excise duty on small cars, scooters, motorcycles and commercial vehicles was brought down to 8 per cent from the earlier 12 per cent in the interim Budget. Taxes were also reduced on SUVs and large cars to 24 per cent from the highest bracket of 30 per cent. On mid-size sedan, the tax was cut to 20 per cent from the earlier rate of 24 per cent.
(With inputs from ET Bureau)
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