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Excise duty on SUVs hiked, 100% import duty on luxury vehicles

Hikes import duty on motorcycles with engine capacity of 800 cc or more to 75%; yachts to 25%

Press Trust of India New Delhi
Excise duty on sports utility vehicles has been increased to 30%, while all luxury vehicles, including super bikes will attract 100% import duty.

"SUVs occupy greater road and parking space and ought to bear a higher tax. I propose to increase the excise duty on SUVs from 27% to 30%. However, the increase will not apply to SUVs registered as taxis," Finance Minister P Chidambaram today said in his Budgetary proposals.

Stating that the affluent class in India consumes imported luxury goods such as high-end motor vehicles, motorcycles, yachts and similar vessels, Chidambaram expressed confidence that "they will not mind paying a little more".

"Hence, I propose to increase the duty on such motor vehicles from 75% to 100%," he added.

Chidambaram also proposed to hike the import duty on motorcycles with engine capacity of 800 cc or more to 75% from 60%.

"...And on yachts and similar vessels from 10% to 25%," he added.

To boost manufacturing and selling of environment-friendly vehicles, Chidambaram proposed to continue and extend the currently available concessions on specified parts of electric and hybrid vehicles till March 31, 2015.

In Budget for 2012-13, the excise duty on specified parts of hybrid vehicles was reduced to 6% from 10%.

Excise duty on lithium ion battery packs for electric or hybrid vehicles was also cut to 6% from 10%.

Besides, the full exemption from basic customs duty and special CVD with concessional excise duty or CVD of 6% on some parts of hybrid vehicles was extended to specified additional items and lithium ion batteries imported to make battery packs for electric or hybrid vehicles.

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First Published: Feb 28 2013 | 2:00 PM IST

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