India’s government has announced a reduction to excise duty on cars as part of an interim Budget. The measure will be welcome in a sector that has suffered as India’s economy has cooled.
Finance Minister P Chidambaram said the reduction would “give relief to the automobile industry, which is registering unprecedented negative growth.”
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Excise duty for small cars, scooters, motorcycles and commercial vehicles will come down to 8% from 12%. SUVs will attract excise duty of 24% versus 30% previously.
Excise duty on large cars will now be 24% compared with 27% previously and the duty on mid-sized cars will go down to 20% from 24%.
The excise duty cut will be applicable up to June 20, 2014.
Commentators in India noted that the changes will be well received by India’s middle-class in an election year.
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