Team-BHP - Budget 2007-2008

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The Budget is round the corner and what are the implications for us car nuts?
Are car prices coming down or going up? If there are some cuts, will the manufacturers pass it on to the buyers or make merry with the benefits? So, should we wait to buy a new car or "just do it" as they say? My friend is in the market for a new car and asked me about this.
Please advice guys and gals and thanks in advance:)

I don't think there will be cut on excise duty for small cars, as its already at 16%.

Seems that some category of Sedan may see a duty cut. Interesting to see would be the criteria for this cut. It could be length of the car or poser of the engine.

But we can never reject the possibility of excise duty cuts for small cars since anything can be expected. And Govt. is very much interested in pushing up the auto-sector growth.

Source: Buying a car? Wait for budget 2007 : union budget, 2007, cars, small cars, excise duty, cut : IBNLive.com : CNN-IBN

In the key proposals to the Pre budget memorandum, the industry has asked for a uniform excise duty of 16 per cent on all passenger vehicles, which means that while small cars may cost the same, mid size cars are expected see an 8 per cent excise cut.

However, since two months ago most auto companies increased car prices, the net effect be small cars becoming more expensive than previous year.

"Post-budget, the excise duty will reduce on cars and companies will most likely reduce the prices. Yet the prices after the budget wont be less than the ones given out in December 2006," said Tax Expert P S Jain.

IMO duty for small cars( < 4M Length and < 1.2L ) will be 8% or 12%. Other cars duty will be 16%. Thus prices across all segments will come down. Obviously all discounts will disappear. There may be a redefinition of length of small car to 3.8 M. This will hit Getz/UVA.

Thanks guys! So, we should wait and watch then, eh? But what about cars above 1600cc and such. I mean the upper mid-size and the entry luxury segment. Will the price cuts be applicable here as well? And

Budget 2007 expectations:

1>. Slash customs duty on completely built units (CBUs) by 10-15%
2>. Small cars[i.e. santro,maruti 800,indica,alto etc] excise duty reduced to 8% from present 16%.
3>. passenger cars excise duty reduced to 16% from present 24%
4>. UV's too to enjoy excise duty reduction to 16% from present 24%.
5> 2 and 3 wheelers to also have excise duty cut to 8% from present 16%.
6>. Custom duty on tyres to come down to 10% from present 12.5%.

7>. Custom duty on auto ancillaries to be made 10-8% from present 12.5%.
8>. CST on auto ancillaries to be made 3 % from present 4%.

depreciation
9>. Plant and machinery to be made 25% from present 15%
10>. Vehicles to be made 25% from present 15%

Source:
Icici research.

Eagerly waiting for the FM's speech.

Roads: Allocation for National Highway Development programme to be stepped up from Rs 9955 crore to Rs 12600 crore.
Work on Golden Quadrilateral road project nearly complete. Considerable progress made on North-South, East-West corridor and is likely to be completed by 2009, says FM.

Bio-diesel to be fully exempted from excise duty.

Wish to see bio-diesel available as easily as the regular diesel. Petro companies, what are waiting for, now that the excise duty is waived of.

Tax exemption limit raised to Rs 1.1 lakh.
No change in service tax rate.
Ad valorem duty on petrol and diesel to be brought down from 8% to 6%.
Education cess on all taxes hiked to 3%. :Frustrati