New Delhi, Feb 26 (Calcutta Tube) Finance Minister Pranab Mukherjee Friday announced a two percent hike in excise tax on prices of large cars, and sports and multi-utility vehicles in the general budget.
However, small cars will continue to get excise duty relief of 4 percent, which was offered on all car segments by the government as stimulus package to the auto industry in 2008 when auto sales had dropped following slowdown in the economy worldwide.
The United Progressive Alliance (UPA) government had spurred the automobile sector by slashing excise duty on two-wheelers (from 10 percent to 8 percent), small cars (from 12 percent to 8 percent) and big cars from 24 percent to 20 percent.
India is now seen as a hub for the small cars segment and many global majors have ventured into India in the last four years.
Last year, companies marked their presence across the globe with record high exports. The year 2008 also saw the launch of the world’s most economical car, Nano.