Bicycle prices are set to go up by 3-4% after an increase in excise duty and import duty on parts in the Budget for 2012-13.
The bicycle makers at the local manufacturing hub here hailed the Budget proposal to hike import duty saying that it would curb "unhindered" import of bicycles and parts from China "to some extent".
"Price of bicycle will go up by more than Rs 100 per unit because of 1% increase in excise duty on bicycles and increase in basic excise duty by 2% and increase in service tax," United Cycles & Parts Manufacturers Association (UCPMA) President Gurmeet Singh Kular told PTI here today.
Pointing that the input cost of the manufacturers would jump due to announcement of hike in duty and taxes, he said that bicycle makers would be forced to pass on the impact to customers.
Echoing views, country's largest bicycle maker Hero Cycles also said price of bicycle would go up because of increase in excise duty and service tax.
"Definitely, our input cost will increase and price of cycles will go up," said company's Director, SK Rai said. He further informed the increase in custom duty would also lead to hike in imported bicycle by at least Rs 1,000 per unit.
The Budget has proposed an increase in basic excise duty from 10% to 12% and one to two% on bicycles. Service tax has also been increased from 10-12%.
It has also raised import duty on bicycle and bicycle parts from 10% to 30% and 10% to 20% respectively to save the local industry from the "dumping" of cheap bicycle and parts from China.
Ludhiana-based bicycle manufacturers also opined that this alone would not be sufficient to curb the flooding of bicycle and parts from China at cheaper prices.
"Although raising import duty is a welcome step and it may discourage few players from importing parts from China. But some unscrupulous importers will find a solution to it like involving in under-invoicing of imported bicycles to minimise the impact of duty hike," DS Chawla, former President of UCPMA, said.
