FinMin may review excise duty hike on SUVs: Sources

There could be some relief in the offing for automakers as the finance ministry is likely to review the 3 percentage point hike in excise duty on SUVs announced in the Budget. While sources say North Block will not roll back the duty hike but it is open to giving exemptions to certain categories of vehicles based on price. CNBC-TV18's Ronojoy Banerjee reports.

The proposal made by the finance minister had taken the industry completely by surprise. The excise duty was hiked by 3 percentage points on certain category of vehicles and of which the sport utility vehicle (SUV) were going to be the worst hit.
In the last one year, it is the utility vehicle (UV) that has been growing and that has been spearheading whatever little growth that the industry has seen. There has been a lot of lobbying by the industry. CNBC-TV18 learns from sources that the finance ministry has taken a positive view as far as reviewing this contentious proposal is concerned.
There is no question of a complete rollback but the ministry is likely to exempt certain category of vehicles based on price. This was first proposed a fortnight ago by Heavy Industry Minister Praful Patel in his letter to the Finance Minister P Chidambaram.
Patel written that the SUVs that sell for less than Rs 10 lakh should be exempt. So, if finance ministry goes by that definition, even though we are not sure as to what will be the exemption limit, will it be Rs 10 lakh or Rs 12 lakh, whatever it is Mahindra and Mahindra's (M&M) Bolero, Tata Motors Sumo, General Motors (GM) Tavera and Trax all stand to gain.