India’s plan to levy an additional tax of four per cent on large cars will apply irrespective of the fuel used, the country’s auto industry body said on Wednesday.
India’s plan to levy an additional tax of four per cent on large cars will apply irrespective of the fuel used, the country’s auto industry body said on Wednesday.
In his Union Budget announced on Monday, finance minister Arun Jaitley imposed a ‘green’ tax on passenger vehicles, effective immediately, aimed at helping fight high levels of air pollution and congestion.
The budget document, however, did not specify if the highest tax of four per cent would be applicable on vehicles running on a specific fuel or all transportation fuels.
“I propose to levy an infrastructure cess of 1 percent on small petrol, LPG, CNG cars, 2.5 percent on diesel cars of certain capacity, and four per cent on other higher engine capacity vehicles and SUVs,” Mr Jaitley had said in his Budget speech.
Industry lobby Society of Indian Automobile Manufacturers (SIAM) said on Wednesday that the higher tax would apply to all cars and sport-utility vehicles longer than four metres in length and with engine capacity of more than 1200cc for petrol cars and higher than 1500cc for diesel.
The new tax has come as a “rude surprise” for the auto industry, said Sugato Sen, deputy director general at SIAM. According to the Budget document, three-wheelers, electric and hybrid cars and vehicles running on fuel cell technology are exempt from the new tax. Vehic-les registered as taxis and ambulances, and those used by physically handicapped persons are also exempt.
