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Petroleum Ministry Recommends Higher Excise Duty On Diesel Cars, May Cost Rs. 80,000 Higher Post Budget 2012-13

Rohit — Thu, 19 Jan 2012 10:58:00 +0000

In a recommendation sent by Petroleum Ministry to the Finance Ministry on India, it has been recommended to levy additional excise duty on diesel cars in India in budget of year 2012-13 so as to reduce the demand for Diesel cars in India and this reduce the consumption of Diesel fuel in passenger cars. The step has been taken to reduce the financial burden on the Government which is bearing the subsidies on the Diesel fuel which is sold at subsidized price in Indian markets. If the recommendations are implemented, the Diesel cars my cost as much as Rs. 80,000 higher than their present prices (before budget of 2012-13) starting from coming financial year. image- Diesel engine for illustration only The additional excise duty will be used to recover the losses to the public sector oil companies which are facing losses because of under-recoveries. There is a lot of political pressure attached to the prices of Diesel in India as it’s a primary fuel for farming equipment as well as the road-transportation fuel in India which affects the commodity prices and inflation in India. With the difference in technology and higher build construction required for a diesel engine compared to [...]

Petroleum Ministry Recommends Higher Excise Duty On Diesel Cars, May Cost Rs. 80,000 Higher Post Budget 2012-13 is a post from: CarBlogIndia - All About Automobiles. All Rights Reserved. Copyright Policy

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Diesel Cars To Get Much More Expensive Than Petrol Cars In 2012

Rohit — Tue, 22 Nov 2011 09:17:07 +0000

After the sharp petrol price increases in past two years, the balance between petrol and diesel car sales have tuned upside down. Most small car buyers are looking for affordable diesel cars to keep the running costs low. There is a huge difference in priding of Petrol and Diesel in India. Also read – Why Petrol Prices Are So High in India?. The huge demand for diesel cars and subsequently higher demand for diesel fuel in India is putting burden on Govt. of India in form the subsidy it gives for the Diesel. This has led to an alarming situation for the Govt. as they need to discourage the sales of Diesel cars by any means to discourage the use of diesel in passenger cars. Delhi state government already imposed additional registration tax on Diesel cars in Delhi because of environmental reasons. image – Diesel Engine There is already a difference in price of about Rs. 70,000 to Rs. 1,00,000 between the petrol and diesel engine cars as the diesel cars are costlier because of the complexity and strength of components needed for a diesel engine. However, with the Govt. deciding on putting additional taxes and duties on the diesel [...]

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Diesel Car Prices Increased In Delhi- Higher Taxes Imposed On Diesel Cars

Rohit — Thu, 24 Mar 2011 07:27:29 +0000

If you are planning to buy a Diesel Engine car in Delhi, be ready to shell out some extra money for taxes. Diesel cars in Delhi are already taxed higher than the petrol engine cars, but with the new announcement in the Delhi State budget, Diesel engine cars will now pay 25% extra levy on state taxes in Delhi. This will mean another sharp rise in the price of Diesel engine cars like Maruti Swift Diesel, Ford Figo Diesel, Volkswagen Polo Diesel, Tata Indica Diesel, Mahindra Scorpio, Mahindra Xylo, Maruti Swift Dzire Diesel and all other diesel engine cars ! Buying a Diesel engine car in Delhi will become costlier. The registration and taxes make a considerable part of the on-road cost of a vehicle to the buyer, with this increase, the cost to customer will become higher. The argument behind this step is that Diesel engine cars contribute more to the air pollution. But the new low sulphur diesel used in the modern CRDI Diesel Engines, the emissions may be even lesser than the petrol engines. Yes the old generation cars with mechanical diesel injection technologies do make more pollution, but increased taxes on the new cars with CRDI [...]

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CKD Duty Rates Increased 3 Folds For Most CKD Units

Rohit — Wed, 23 Mar 2011 08:53:06 +0000

The Indian Union Budget of 2011 has upset the Indian automobile market quite well with the definition change of the CKD (completely knocked down units) to SKD (semi-knocked down units) which was later clarified by the Govt. of India. The change of definition brought a wave of unrest among the automakers who import their car components in India as partially assembled units like engines and transmission units. The definition change resulted in a rise of about 6 folds in the duty from 10% to 60%. After the clarification though, the worries of the automakers lessened, but the recent developments seem to be again disturbing for the car and bike manufacturers. The impact hits mostly the International brands which get their engines, transmissions and other vital components into India and assemble and sell them in India. As per the latest information, the duty on CKD kits have been increased 3 folds to 30% from the previous rate of 10%. Engine and transmission are the two exceptional components which will still attract only 10% of the duty, rest all the CKD units will attract 3 times the duty. In simple language, it means that the luxury cars or cars with imported CKD [...]

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Expensive Cars CKD Excise Duty Confusion Cleared By Indian Government

Kashish Bidsar — Fri, 18 Mar 2011 10:28:43 +0000

The CKD unit excise duty confusion has been finally cleared by the Indian Government and has redefined it. Earlier there was a lot of confusion regarding the duty that will be attracted by car components being imported by expensive automakers such as BMW, Mercedes-Benz and Audi, which now is completely transparent from the government’s end. Let us see the percentage of tax imposed by the government and on which articles: According to the finance ministry, vehicles imported as CKD kits with pre-assembled engine, gearbox, etc. will attract a duty of 60% On the other hand if these components are imported separately for local assembly then they will incur duty as low as 10% So from now onwards cars from all the leading manufacturers of expensive and luxurious products will cost almost the same provided they keep shipping these components the way they were being. Manufacturers like Toyota, Volkswagen, Honda etc. may continue selling their products at current prices however sedans such as BMW 3 series, Mercedes C Class and Audi A4 are likely to get affected by it. So the bottom line remains that vehicles coming as CKD kits will have an edge over the CBU unit product which attract [...]

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Imported Car Components Will Become Expansive?

Rohit — Fri, 04 Mar 2011 09:16:18 +0000

Many car makers in India, especially the International players like Volkswagen, BMW, Mercedes Benz, Toyota etc.. import their cars in CKD or completely knocked down unit. This reduces their cost of manufacturing in India and gives them a cost advantage over importing the whole car as a CBU which attracts huge duties. But things are going to change post the Indian Union budget 2011. Though the statements in the budget came in fine print without much detail or clarification on it, the Finance Minister of India declared that the pre-assembled parts such as engines and transmissions will now need to pay 60 percent customs duty and will now be considered as semi-knocked down kit. This change in definition is not only a theoretical change, but a financial change which means a lot of trouble for International car makers who earlier used to get their engines and transmissions under the CKD duty structure may not have to pay higher duties and taxes which will make even small cars with imported components more expansive in India. There has not been details in the budget speech on this point and SIAM has requested clarification on it from Finance Ministry. Hope the clarification will [...]

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Budget 2011 – No Excise Dusty Hike Announced For Cars

Rohit — Mon, 28 Feb 2011 08:08:36 +0000

It’s a good new for the automobile industry in India which has been reporting a strong growth in past some time. Both the car makers and buyers had their worried about expected rise in car prices post Indian Union Budget 2011 as there were speculations in the industry about a potential increase of prices because of excise duty increase expected. Also there has been no mention of any special change in small Diesel Engine car prices as proposed by the “Kirit Parikh committee” in their report. On taxes and reforms front also, the budgets is perceived to more or less neutral and does not hurt much to any specific industries. Since there has been no significant rise in taxes, it will help retain the purchasing power of the consumers to buy cars. We expected that Indian automobile industry will continue its good growth in the financial year 2011-12 as it has done on the current financial year. The detailed analysis of budget will come out soon, stay tuned, we will bring you details when they arrive. You can sign up for our free email newsletter for daily updates. Budget 2011 – No Excise Dusty Hike Announced For Cars is a [...]

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Diesel Cars May Become Costlier In March 2011 After Union Budget 2011

Rohit — Mon, 21 Feb 2011 09:59:28 +0000

Government of India consults a lot of Economic experts and other eminent experienced people before formulating the guidelines and rules in the annual Indian Budget. As per one of these reports, the recommendations make by “Kirit Parikh committee”, there are many suggestions related to the Oil industry. The report talks of proposals to reduce economic burden on the Govt. by increasing Kerosene and LPG prices and deregulating Petrol and Diesel prices. The most striking recommendation in the report is to increase the prices of Diesel engine vehicles An additional excise duty on a diesel vehicle to bring it at-par with petrol driven cars. At the current levels of usage, an additional excise duty payable amounts to about Rs.80,000/year. This recommendation is enough to make the major carmakers in India worry about the Diesel car pricing and sales. Most of the small diesel cars in India are sold because of their low running cost. If the initial cost of the car is increased by a big amount (amount may be announced in this budget), the economic factor for low running cost will be automatically offset. This will mean a drastic drop in the sales of small cars powered by Diesel engines. [...]

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Excise Duty Relief For Rural Utility Vehicles Expected In Budget 2011

Kashish Bidsar — Fri, 18 Feb 2011 09:40:16 +0000

Rural utility vehicle or vehicles meant for rural markets are the most essential sort of vehicles needed by almost every developing and developed nation. Vehicles like tractors, farm equipments are the basic means of cultivating, harvesting and transporting goods from the fields to the actual market and hence are very important. Currently utility vehicles carry an excise duty of as high as 22% which is equal to what certain luxury cars like BMW X1 and Chevrolet Captiva carry and therefore are less attractive for rural people who intend to buy these useful vehicles. image credit- Flickr Moreover it has been a topic of debate for the government and recently this is what an official belonging to the heavy industry said, “There is a consensus to subsidize some specific vehicles that have a mass market in rural areas. We have been looking at options to de-classify these from other vehicles that are in highest tax net so that rural users can enjoy competitive prices like tractors and other farm equipment ,” Going back in 2006-2007 the Government had drastically reduced the duty on small cars to 16% and 24% for vehicles under 4 meters and with 1200CC & 1500CC engines respectively, [...]

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Car Prices After Budget 2011 Likely To Increase

Rohit — Sat, 05 Feb 2011 10:04:03 +0000

Car prices after the budget is announced in Fed 2011 might go higher. The reason for the hike maybe the expected 2% increase in the excise duties on the small car for the second time in a row as it did last year in 2010 Indian budget. As during the recession the year 2008-09 globally, Indian Govt. implemented a cut on the excise duty from 12% to 8%. Last year in 2010 budget, the rate had been revised upward to 10%. Rumors are that this year in 2011, the rates may further be increased by 2% bringing it to 12% as it was before the economic crisis. This increase in excise duty will hit the automobile market sales adversely, especially the small car segment buyers who are most sensitive to the cost. Nothing is official as of now, but the chances are high that it will be revised upwards. Lets keep our fingers crossed and wait until the official budget speech by the Finance Minister of India. image credit – flickr Car Prices After Budget 2011 Likely To Increase is a post from: CarBlogIndia - All About Automobiles. All Rights Reserved. Copyright Policy Connect With CarBlogIndia