Auto, Consumer Durables Welcome Continuation Of Low Excise Duty Till December

Finance Minister Arun Jaitley has announced that the government would continue with low excise duty for automobiles, consumer durables and capital goods sectors till December 31. All these sectors are under stress due to weak sales and slow economic growth.

The duty cuts on small cars, two wheelers and commercial vehicles, large and mid-segment cars and sport utility vehicles (SUV) will continue till December this year. The auto industry has welcomed the government's decision to extend the duty-cut benefits.

The duty cuts, announced by the former finance minister P Chidambaram in February, had provided much-needed relief to the sector that has been facing slowdown for two years. Following the duty cuts, auto companies passed on the benefits to the consumers, making vehicles more affordable.

Since the duty cut was coming to an end on June 30, some automakers were planning to increase the prices of the vehicles.

Vikram Kirloskar, president, Society of Indian Automobile Manufacturers (SIAM), said, “We are certain that the extension of the reduced excise duty will contribute positively to improve the buyer sentiment and would help in bringing about a sustained recovery in the automotive industry that has been languishing for over two years now. This will go a long way in bringing back growth, investments in the industry as well as encourage higher employment."

Pawan Goenka, executive director, Mahindra & Mahindra, said, “This will give the much-needed boost to the industry as we lead up to the festive season."

The finance minister will present his first budget on July 10 and the industry has expected the government to maintain the reduced excise duty. “We hope government will extend it for the full year in the upcoming Budget as the sector continues to be sluggish. We also expect the government to announce other measures in the Budget to revive growth," said Arvind Saxena, president and managing director, General Motors.

Similarly, status-quo was maintained on excise duty on consumer durables and capital goods sectors.