Auto Industry Welcomes Union Budget

SIAM has welcomed the Union Budget 2011-12, terming it as a “Reform Oriented Budget”. The FM has given a clear message to the industry by announcing setting up of National Mission for Hybrid and Electric Hybrid vehicles. The Budget also saw several fiscal measures for promoting such vehicles including introduction of 10% excise duty for Fuel cell and Hydrogen vehicles, exemption to specified parts from Basic Customs Duty and CVD along with 5% excise duty, etc. which would provide a significant incentive to promote the development, manufacturing and sale of such vehicles in India.

The Finance Minister has also removed certain anomalies in the excise duty structure like Taxi Refund extended to vehicles with seating capacity up to 13 persons and exemption to factory-built ambulances from additional excise duty. The most important worry of the automobile industry has been resolved with the Government not rolling back the economic stimulus package and maintaining the Central CENVAT rate. The industry, however, was expecting some rationalization of excise duty on larger cars and utility vehicles, at least removal of additional excise duty of Rs 15,000/- from such vehicles, which was not announced.