Govt clarifies additional excise duty on SUVs

The government on Wednesday clarified that additional excise duty on sports utility vehicles (SUVs) will not be applicable to cars viz. SX4, Corolla Altis, Honda Civic. These cars will not be attracting the additional three percentage hike excise as they are known more as sedans, reports Ronojoy Banerjee of CNBC-TV18. The SUV tax proposal was proposed during the budget in February 2013.

Also read: FinMin may review excise duty hike on SUVs There was an inadvertent error made as the idea was to tax the bulky bigger vehicles – sports utility vehicles (SUVs). But the categorisation based on engine, ground clearance and length impacted many of the other popular sedans. The clarification would appear to be vague. However, Maruti will be one of the biggest gainers from this move. None of Maruti’s products will now be impacted. The only product which was impacted earlier was SX4. A senior official in Maruti said that the company will pass on the benefits of a lower excise duty. The car will now attract a duty of 27 percent. If the extra 3 percent will be passed on, it might trigger a turnaround for the fortunes of SX4.