Mumbai: Maruti Udyog Ltd. said it would raise prices of its vehicles from March 15, after the government proposed to impose an additional cess to raise funds for education.
The budget imposes a cess of 1% on all taxes to fund secondary and higher education, in addition to the existing 2% levy which raises funds for basic education.
Maruti, a unit of Japan’s Suzuki Motor Corporation, said the new cess was the reason for the price rises.
The company said it was not raising prices immediately so consumers could buy cars at pre-budget prices, but did not specify the extent of the increase or say which models it would apply to.
“In the run-up to the budget, there was speculation that certain taxes or duties may come down,” Maruti said in a statement, referring to an expectation that excise duty on passenger vehicles might have been cut.
“Owing to that, several customers postponed purchase of new cars till after the budget. In light of this, the company has decided to defer the hike to allow these customers to purchase cars at pre-budget prices,” it said.
Maruti, which makes the popular Alto and Swift hatchbacks, last raised prices on some of its models by up to Rs12,000 rupees on 1 February 2007 to help offset higher costs.
Shares of Maruti ended down 5.4 % at Rs839.70 amid a general decline of 4% in the benchmark sensex of the Bombay Stock Exchange.