Ministry seeks excise duty sop on urban mission bus purchases

The Centre had announced a Rs 4,735-crore package for states to buy 15,000 buses for urban transport under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). This step was taken to boost sale of commercial vehicles whose demand had slumped during the recession.

If the finance ministry agrees to this proposition then stimulus package buses will come 8% cheaper to the state governments as the manufacturers would pass on the benefit to the states.

“If we want an improved public transport system in India, there is a need to give incentives to the state corporations to buy more and more modern buses. In fact, the tax structure should be made in a way that city and state corporations end up paying zero taxes and this will boost demand for low-floor buses,” Akash Passey, managing director, Volvo Buses India said.

The company, which bagged orders for 500-600 modern low-floor buses, has already delivered 80% of them. Volvo Buses India currently sells city buses, coaches and multi axle buses in the range of Rs 70 lakh to Rs 1 crore.

In case the finance ministry agrees to the recommendation of urban development ministry, it will give a big boost to the auto sector.

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