SUV’s and Hatchbacks to get costlier
According
to Union Budget 2016, an infrastructure cess has been announced on hatchbacks
and SUVs.
India: According to the Union Budget 2016
announced by Finance Minister Arun Jaitley, the government will levy infrastructure
tax on all four wheelers, including even small sized cars.
The government is ready to charge 1%
additional infrastructure cess on small CNG and petrol cars. The tax is decided
to be 2.5% for diesel cars and 4% for SUVs and other luxury cars. The new tax
levied on the passenger cars will increase the price in coming months.
In addition to the infrastructure duty,
an additional tax of 1% will be charged on luxury cars costing more than ten
lakhs. This move of government is considered as a step to keep check on the
increasing pollution across the country and also enhance the use of electric
cars. The government is also considering to provide exemptions on environment
friendly vehicles such as electric and hybrid cars.
This increase in tax is further
anticipated to increase the pressure on SUVs and luxury car manufacturers who
are already witnessing the declining sales due to recently imposed ban on
registration of diesel vehicles of more than 2000 cc in the National Capital
Region till March 31, 2016.
The recent report published by TechSci Research, “India Tyre Market Forecast and Opportunities, 2020”
indicated that passenger car tyre market in India is second largest tyre
segment. It is projected that with increasing prices of passenger cars in the
country, the sales and production of passenger cars would witness significant
difficulties in coming years consequently affecting the demand for OEM tyres in
the country.: