Every year this annual tamasha has analysts and industrialists either hailing it or condemning it in sugar coated words. One wonders where the annual allocation on agriculture, education, road building, infrastructure etc goes year after year when very little seems to be improving. For the common man on the street, this annual tamasha no longer excites him. He only believes that he has to tighten his belt a wee bit more! Coming to the automotive world of ours, let’s just find out what we have achieved in this year’s budget. The basic excise duty has been hiked from 10pc to 12pc. This move will increase prices of small cars (under 4 metres) and two wheelers. Excise duty on cars (measuring above 4 metres in length) has been increased from 22pc to 24pc. Excise duty on mixed group vehicles like MUVs and SUVs has been changed from 22pc +Rs. 15,000 to a flat 27pc.
Excise duty on all Completely Built Unit (CBU) imported cars costing over US$ 40,000 has increased from 60pc to 75pc. This means people like Michael Perschke, Peter Honegg and a few others will be sulking for quite a while.
Additional imposition of duty on diesel vehicles has been avoided. That’s good news for the likes of Anand Mahindra, the Hindujas and the Tatas, to name a few. There also has been no imposition of excise duty on parts imported into the country for manufacturing hybrid and electric vehicles. The government is anyway not doing much for this sector. Customs duty on bicycles and parts has been increased too. S.P Singh of the Indian Foundation of Transport Research and Training says that the 2pc increase in excise duty from 10pc-12pc shall broadly impact the light commercial vehicles (LCV) cost by Rs.12,000/- - Rs.15,000/-, intermediate commercial vehicles (ICV) by Rs. 20,000/- - Rs.22,000/-, medium commercial vehicles (MCV) by Rs.28,000/- - Rs.35,000/-, multi-axle vehicles (MAV) by Rs.37,000/- - Rs.45,000/- and multi-axle trailers (MAT) by Rs. 40,000/- - Rs.50,000/-. In case of building of commercial vehicle bodies is currently exempt from excise duty. In lieu of this duty, a specific rate of Rs10,000 is being charged on chassis in addition to the applicable ad valorem duty. Therefore, effectively the direct impact on the buses in addition to increase in the basic excise duty as stated above shall at least add upto Rs.20,000/- for LCVs, Rs.28,000/- - Rs.30,000/- for ICVs, Rs. 45,000/- - Rs.50,000/- for MCVs and Rs.60,000/- - Rs.65,000/- for MAVs
How can all these vehicles move without a fine set of tyres? Excise duty on tyres and tubes has been increased by two per cent. A pair of truck / bus tyres will be now costlier by Rs.550/- - Rs.600/-, light trucks by Rs.350/- - Rs.380/-, a SUVs tyre costlier by Rs.75/- - Rs.120/-, a popular passenger car tyre (wagon – R, Hyundai Santro, Indica etc.) to be costlier by Rs. 50/- - Rs.60/-.
The service tax on transportation of goods by road has been revised to 12pc from 10pc in the Union Budget, however the government already has given 75pc rebate on the levy of service tax on gross freight and therefore for all practical purpose the service tax on goods transport agency services has just gone up from 2.5pc (75pc of 10pc rate) to 3.0pc (75pc of 12pc rate). In short, I give this budget three points out of ten. Final Score: 3/10
Punnoose Tharyan, Editor, Motown India and Car N Style magazines / ptharyan@gmail.com
