Excise sop for CNG & LPG cars

[mithun]

India is joining the bandwagon of nations rushing to clean up the tailpipes of vehicles and promote low-emission cars. In a bid to push sales of alternate fuel vehicles in the country, the government is now planning to extend an 8% excise duty concession to small cars running on fuels like CNG, LPG etc.

With this, all small cars that fall under the 4-metre length cap running on alternate fuels will also attract an excise duty levy of only 16%. The concession was made available in the Union Budget only for cars driven by an under-1200cc petrol engine or under-1500cc diesel engine. All other cars are charged 24% excise duty.

This is part of an attempt to promote the use of alternate fuels in personal transport vehicles as well. This will help make the alternate fuel vehicles more affordable for the consumer, a senior government official told ToI.

The concession would, however, be restricted to cars that fall under the 4-metre length restriction as prescribed in the Union Budget 2006-07, the official said. We are keeping the other parameters for this excise duty cut the same as in the case of cars run on regular fuels, the official added.

The biggest beneficiary of this extension would again be the country’s largest car maker Maruti Udyog Ltd, which is planning to roll out an LPG-powered WagonR this month. But, government officials are confident that the move would prompt other manufacturers to also look at the option. Hyundai, for instance, has been exploring the feasibility of introducing an LPG variant of its popular small car Santro.

The excise duty cut on small cars has already resulted in more manufacturers looking at this market for future roll-outs. We have Toyota, General Motors and others planning small cars for India. Maruti has also been selected to build small cars for Nissan globally. We feel the extension of this duty cut to alternate fuels will result in similar excitement, the official added.

Maruti had unveiled the LPG WagonR this year. The car has a regular petrol tank and a circular LPG cylinder which is placed in the slot meant for spare tyre, which in turn has been fitted into the luggage unit.

Courtesy

[tsk1979]

This is lame.
There is no excise cut.
From what I understood, its just that before this only petrol and diesel small cars were getting excise cut, and it got extended to LPG/CNG.
Which means cleaner air vehicles were actually costing more, they brought them at par. Which does nothing to encourage people to go for cleaner fuels.
The fact is govt does not care about any company if its not rich enough to influence it.
Look at Reva. This car deserves 0% taxes and duty. But do we get that. To get people to use clean air vehicles you have to offset the harship in using them.
For example cng. CNG would mean hunting for fuel stations. Unless that pain is offset by cheaper cars, most people wont care.
A really lame move.

[revharder]

Originally Posted by tsk1979

This is lame.
There is no excise cut.
From what I understood, its just that before this only petrol and diesel small cars were getting excise cut, and it got extended to LPG/CNG.
Which means cleaner air vehicles were actually costing more, they brought them at par. Which does nothing to encourage people to go for cleaner fuels.
The fact is govt does not care about any company if its not rich enough to influence it.
Look at Reva. This car deserves 0% taxes and duty. But do we get that. To get people to use clean air vehicles you have to offset the harship in using them.
For example cng. CNG would mean hunting for fuel stations. Unless that pain is offset by cheaper cars, most people wont care.
A really lame move.

exactly.
imho, govt. should give some extra concessions to such vehicles which runs on alternative energy/fuel.
only this way the public will move towards the cleaner vehicles.
infact they should give some additional subsidy too over such productions!

[amit]

Look at Reva. This car deserves 0% taxes and duty.

I totally agree and I have always wondered why the government hasn't offered this to Reva. In fact, I believe Reva owners should be exempt from paying toll too. But then, when has environment been a priority with our government?

[mithun]

There is no excise cut.
From what I understood, its just that before this only petrol and diesel small cars were getting excise cut, and it got extended to LPG/CNG.

@tsk1979 : Are you sure that there is no other extra excise duty concession other than that excise duty concession that was introduced for smaller cars in the 2006 budget ?

[tsk1979]

There is no special concession for even the Reva which is a Zero Emission vehicle. Our politicians are too short sighted to consider such things unless it fills their pockets

[directinjection]

Originally Posted by mithun

India is joining the bandwagon of nations rushing to clean up the tailpipes of vehicles and promote low-emission cars. In a bid to push sales of alternate fuel vehicles in the country, the government is now planning to extend an 8% excise duty concession to small cars running on fuels like CNG, LPG etc.

With this, all small cars that fall under the 4-metre length cap running on alternate fuels will also attract an excise duty levy of only 16%. The concession was made available in the Union Budget only for cars driven by an under-1200cc petrol engine or under-1500cc diesel engine. All other cars are charged 24% excise duty.

This is part of an attempt to promote the use of alternate fuels in personal transport vehicles as well. This will help make the alternate fuel vehicles more affordable for the consumer, a senior government official told ToI.

The concession would, however, be restricted to cars that fall under the 4-metre length restriction as prescribed in the Union Budget 2006-07, the official said. We are keeping the other parameters for this excise duty cut the same as in the case of cars run on regular fuels, the official added.

The biggest beneficiary of this extension would again be the country’s largest car maker Maruti Udyog Ltd, which is planning to roll out an LPG-powered WagonR this month. But, government officials are confident that the move would prompt other manufacturers to also look at the option. Hyundai, for instance, has been exploring the feasibility of introducing an LPG variant of its popular small car Santro.

The excise duty cut on small cars has already resulted in more manufacturers looking at this market for future roll-outs. We have Toyota, General Motors and others planning small cars for India. Maruti has also been selected to build small cars for Nissan globally. We feel the extension of this duty cut to alternate fuels will result in similar excitement, the official added.

Maruti had unveiled the LPG WagonR this year. The car has a regular petrol tank and a circular LPG cylinder which is placed in the slot meant for spare tyre, which in turn has been fitted into the luggage unit.

Courtesy

You seem to have forgotten to name the publication from which you took the article. Also, instead of pasting the full article, you should just give the hyperlink by clicking which the reader can read the article on the publisher's website. Copyright law issues, you know!

[directinjection]

Originally Posted by tsk1979

This is lame.
There is no excise cut.
From what I understood, its just that before this only petrol and diesel small cars were getting excise cut, and it got extended to LPG/CNG.
Which means cleaner air vehicles were actually costing more, they brought them at par. Which does nothing to encourage people to go for cleaner fuels.
The fact is govt does not care about any company if its not rich enough to influence it.
Look at Reva. This car deserves 0% taxes and duty. But do we get that. To get people to use clean air vehicles you have to offset the harship in using them.
For example cng. CNG would mean hunting for fuel stations. Unless that pain is offset by cheaper cars, most people wont care.
A really lame move.

There is indeed an excise cut (if the report is true and the intended change is implemented). As per the present provision, a 4-meter car with a 1300 CC petrol engine attracts 24% duty whereas after this is implemented, the car would attract a duty of only 16% provided CNG kit has been factory-fitted, notwithstanding the fact that its engine size exceeds 1200 CC. So, the likes of Palio 1.2 (and even 1.6), Getz, Indica petrol and Swift stand to benefit, if they come with CNG kit.

The other points raised by you are indeed true. CNG vehicles are meaningless if there are no stations to get the gas from.

In my opinion, if an Indian manufactured vehicle exceeds the prescribed pollution norms, it should attract lower duty. This will encourage the manufacturers to introduce Euro-IV cars in the country which they anyways manufacture for export to Europe. Europe went Euro-IV with effect from 1 January 2005.