The Standing Committee on Finance has called the government's move to impose additional tax on SUVs as discriminatory. Chairman of the Committee Yashwant Sinha has written to P Chidambaram opposing the move to Tax SUVs and he wants luxury cars to be taxed instead.
The Standing Committee on Finance has called the government’s move to impose additional tax on SUVs as discriminatory.
Chairman of the Committee Yashwant Sinha has written to Finance Minister (FM), P Chidambaram opposing the move to tax SUVs and he wants luxury cars to be taxed instead, reports CNBC-TV18’s Ronojoy Banerjee
Last year’s key highlight of the Budget was the retrospective amendment because of which the industry was up in arms. This time, it is the SUV tax. Barely a fortnight after Praful Patel had written, now Yashwant Sinha is calling it discriminatory.
There are principally two aspects in the letter which Yashwant Sinha has tried to bring Finance Minister’s attention on. One is the fact that while a Bolero which costs only Rs 7.5-8 lakh as compared to a luxury vehicle like a Mercedes-Benz S Class which costs over Rs 90 lakh, less than 1/10th (one tenth) of the value of a Mercedes-Benz S Class a Bolero now will be viable to pay a higher excise duty as compared to these luxury vehicles.
Yashwant Sinha wants more clarity on this front. The other thing that he has highlighted is the fact that there are only a handful of SUV manufacturers who are going to be impacted.
However, Maruti Suzuki ’s Ertiga which is the largest selling utility vehicle (UV) in the country today, will not be taxed. So also, Renault’s Duster will not be taxed. That is why Sinha feels that this is clearly discriminatory and needs to be corrected. He is hopeful that there will be a re-examination, but whether the FM will re-look at this issue is still unclear.
The indications from the finance ministry are that they will come up with a tighter definition of SUV, which will lead to exempting some sedans which had also fallen into this category based on the parameters that the finance ministry had set out.
However, industry is still hoping that there will be an exemption based on price. Society of Indian Automobile Manufacturers (SIAM) had said that vehicles with an assessable value of Rs 12 lakh should be left out.
M&M stock price
On June 30, 2015, Mahindra and Mahindra closed at Rs 1281.20, down Rs 3.8, or 0.3 percent. The 52-week high of the share was Rs 1421.00 and the 52-week low was Rs 1106.00.
The company's trailing 12-month (TTM) EPS was at Rs 53.47 per share as per the quarter ended March 2015. The stock's price-to-earnings (P/E) ratio was 23.96. The latest book value of the company is Rs 323.90 per share. At current value, the price-to-book value of the company is 3.96.
READ MORE ON The Standing Committee on Finance, SUV tax, P Chidambaram , Yashwant Sinha, luxury cars, Budget, Praful Patel , Mercedes-Benz S Class, Bolero, SUV manufacturers, Mahindra and Mahindra, Maruti Suzuki, utility vehicles (UV), Renault, Duster , Society of Indian Automobile Manufacturers (SIAM), Tata Motors, General Motors, Ertiga
Set email alert for
ADS BY GOOGLE
video of the day
See new highs this fiscal; near term clouded: Nilesh Shah