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Prices of Maruti SX4, Honda Civic and Toyota Corolla are expected to go down by about three per cent, following a notification issued by the Central Board of Excise and Custom (CBEC), de-recognising these as ‘sports utility vehicles’ (SUVs). All three sedans would thus be charged at 27 per cent as against the 30 per cent charged since March 1. The Union Budget had clubbed these with utility vehicles, on which the excise duty was raised to 30 per cent.
The CBEC admitted the three models are known as sedans in trade, not as SUVs. Motor vehicle makers had issued references seeking clarification from the CBEC as to whether the excise duty of 30 per cent is applicable on sedans too. In the budget, the government had raised the duty on models which satisfied all the three conditions mentioned at Sl. No. 284A of the Table in notification No. 12/2013-CE, dated March 1.
These included engine capacity exceeding 1,500 cc, length over 4,000 mm and ground clearance at 170 mm or above. Excise duty on all models irrespective of whether it was an SUV was, thus, raised to 30 per cent from 27 per cent. Vehicle makers, however, had approached the finance ministry for clarification. Shekar Viswanathan, vice-chairman, Toyota Kirloskar Motor, said, “I am glad the government has issued the clarification. It was creating a lot of confusion with the dealers and the customers.”
Honda’s premium sedan Civic is among the models which had got impacted due to the duty rise. The company has said it would reduce the price of the model.
Honda civic is on its way out of the market and the company is not keen on continuing with its production.
Jnaneswar Sen, Senior VP, Marketing and Sales, Honda Car India, said, "This is a welcome move by the government. Definitely there will be price reduction on around 3%. The excise duty is laid on the ex-factory price and the freight costs is charged on the factory cost. But the freight cost will not change."
