Team-BHP - The 2012 Budget and its effect on the Indian Car Scene

Note from Mod : The Budget 2012 discussion may continue on this simpler, new thread.

Until now no announcement on direct taxation on diesel cars.

Economic survey report dodged the issue.

Awaiting further announcements.

Excise duty on large cars raised from 22 % to 24 % 27%. No further details as to classification criterion as of now. General Excise duty rates hiked from 10% to 12% (20% jump) across the board.

CBU SUV import duty increased from 60% to 75%

Unless he takes up the matter again with petroleum pricing, all the hoopla over diesel car price hike ends with a 2% hike across the board, petrol and diesel.

In that case, he may have something for diesel prices hike.

Only time will tell.

Edit: if even the diesel prices go untouched, god help people who want to sell their petrol cars. It will be a feast for petrol used car buyers and now, will make even more sense than buying new.

Couple of years from now, assuming govt uses the same approach, spotting a petrol sedan would be like finding diamonds in the coal mine.

Let me get this clear, Only CBU SUV's duty is increased? No other CBU's?

So basically the budget reduces the duty on cigarettes and increases on cars? Should it not have been the other way around? If I read correctly?

Regards,

Quote:

Originally Posted by S350L-E240 (Post 2716015)

The excise duty on large cars has been increased from 23 to 27%. Dont know if this is for only SUV or large D segment cars. duty on cigarettes have been increased, not decreased.

All the talk of tax on diesel cars ,80k more on cars has not been implemented!! great for potential diesel car buyers, not so good for people who want to sell their 2nd hand diesel cars!!(me too!)stupid:

Service and excise duty increased to 12% from 10%, not very nice! I am happy duty on Tv's and mobiles have been reduced!clap:

Here's what I found

Quote:

Budget:
EXCISE DUTY HIKED TO 12% FROM 10%
TO RAISE DUTY ON LARGE CARS
LARGE CARS TO ATTRACT UPTO 27% DUTY
RAISES CUSTOMS DUTY ON IMPORT OF LARGE SUVS
INCREASE CUSTOMS DUTY ON IMPORTED CARS TO 75%

Statements from Manufacturers:
MARUTI: WILL SEE HIGH GROWTH IN DIESEL CAR SALES
MARUTI: DO NOT SEE MUCH GROWTH IN PETROL CAR SALES
MARUTI: WILL SEE HIGH GROWTH IN DIESEL CAR SALES
MARUTI: EXPECT CAR PRICES TO RISE DUE TO DUTY HIKE
M&M: EXCISE DUTY HIKE IS NOT A SURPRISE
M&M: NO EXTRA TAX ON DIESEL VEHICLES IS A RELIEF
TOYOTA: EXCISE DUTY HIKE TO WEAKEN AUTO SALES
GM: MAY SEE PRICE HIKE BETWEEN Rs. 5000-40000
GM: WILL PASS ON EXCISE DUTY HIKE TO CONSUMERS
TVS MOTOR: WILL ANNOUNCE PRICE REVISIONS TOMORROW
TVS MOTOR: NO CHOICE BUT TO PASS ON HIKE TO CONSUMERS

Compiled from the NDTV profit website

What is the government definition for large cars ?
How much was the duty on large cars earlier ?
Does the Excise duty hike apply to all automobiles ?

cars costing more than 20L will be effected, but that is again only the custom duties, so for a car manufactured locally there is not increase (apart form the regular excise duty). No separate treatment for diesel cars, there is a mention of reducing the deficit, so oil price correction (viz. Diesel and LPG) might happen (I guess it will be small but will happen). Good news for the normal commuter.

That is bad news. I was hoping that Pranab da would go ahead with the proposal of significantly increasing the price of diesel cars and continue to subsidize diesel.

Oh the trouble I had to go through to get my car delivered before budget!

Quote:

Originally Posted by jalsa777 (Post 2716072)

What is the government definition for large cars ?
How much was the duty on large cars earlier ?
Does the Excise duty hike apply to all automobiles ?

All cars longer than 4 meters or with cubic capacity more than 1500 for diesel and 1200 for petrol are classified as big cars! These cars will attract excise duty of 24%, where earlier it was 22%. Those cars with cc higher than 2000 will attract even higher rates of 27%. Earlier, this class had to pay 22% + Rs. 15,000.
Due to the standard excise duty hike, there will be a 2% price increase across all automobiles, including small cars i.e cars shorter than 4 meters with engine capacity less than 1.2L for petrol and 1.5 for diesel engines.

The exact text from the FM's Budget speech are:
"Large cars currently attract excise duty depending on their engine capacity
and length. In keeping with the increase proposed in the standard rate, I propose
to enhance the duty from 22 per cent to 24 per cent. In the case of cars that attract
a mixed rate of duty of 22 per cent + Rs 15000 per vehicle, I propose to increase
the duty and switch over to an ad valorem rate of 27 per cent."

This would result in an across the board hike of almost 2% for all cars. Some cars ( mostly SUVs), will see a hike from the current 22% + 15000 INR slab to a value based 27%. Which means a 22 Lac Fortuner would see a price hike of nearly 1 Lac Rupees.

Regards,
Behemoth

No additional tax on diesel cars should come as a relief to prospective buyers and the car manufacturers. Ford/Maruti will now go ahead with their diesel engine capacity expansion plans.

The excise duty hike of 2% will see a price correction across the board.

The best time to buy a used petrol car is now when the demand is at an all time low.