New Delhi: Dashing hopes of big car-makers for an excise duty at par with small cars, finance minister P Chidambaram has ruled out extending tax concessions to larger vehicles.
He also said there was no scope for reducing duties on imported hybrid vehicles, although government could consider giving more tax incentives if they were manufactured in India.
“We are not giving any tax concessions to big cars because they are fuel in-efficient compared to the small car,” Chidambaram told PTI in an interview.
He said the incentives to the small cars were given on the ground that “they are fuel efficient”.The government has been gradually decreasing excise duty on small cars as part of plans to make India a global manufacturing hub.
In 2006 the finance minister had cut excise on small cars to 16% from 24% and this year’s Budget had brought it down further to 12%.
Cars with a length of 1400 mm with engine capacities of 1200 cc for petrol and 1500 cc for diesel qualify for the excise sop on small cars.
On the contrary, the government had recently imposed fixed excise duties on big cars. Engine capacity between 1500 cc and 1999 cc attracted a fixed duty of Rs15,000, while those above 2000 cc had to pay Rs20,000 more.
Asked if there were plans to extend tax incentives to imported hybrid cars, Chidambaram said the government would do so only if they were manufactured in India.