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Budget 2016: Govt notifies infrastructure cess of up to 2.5 pct on cars

Wed March 02 2016, 12:56 pm
  • cars, car infra cess, car cess, car prices, budget 2016, budget news 2016, income tax slab 2016, budget highlights, budget 2016 india, budget 2016 income tax, 2016 income tax rates, tax rates 2016, tax rates 2016-17, budget news

    Budget 2016: Government today notified the imposition of infrastructure cess of up to 2.5 per cent on passenger vehicles, which was announced in Budget 2016-17 but was silent on 4 per cent levy on big diesel SUVs and cars. Vehicles using petrol, LPG or CNG fuels with engine capacity not exceeding 1,200cc and length less than 4,000 mm will attract cess of 1 per cent, Central Board of Excise and Customs said in notification. (PTI)

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    Budget 2016: It further said a 2.5 per cent cess has been imposed on diesel vehicles with engine capacity not exceeding 1,500cc and length not exceeding 4,000 mm. (Reuters)

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    A car normally has a life of seven years and a second car is purchased not before five years by a common man, the official said. (Reuters)

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    The new taxes are likely to have a noxious effect on the Indian automobile industry. It should be reminded that the automobile sector is a key contributor to Indian economy, accounting for at least 40 percent of the country’s manufacturing GDP. Vinod Dasari, President of the Society of Indian Automobile Manufacturers (SIAM), said that the new Union budget is a “mixed bag” for the Indian automobile industry. Indeed according to experts, the sector may experience a negative short-to-mid term impact; however, the rural development will generate stability as the market dynamic evolves and the purchase capacity of people in those sectors increase. Electric, hybrid, and hydrogen fuel-celled vehicles were not further taxed. Nevertheless, according to Shekar Viswanathan, Vice Chairman and Whole Time Director of Toyota Kirloskar Motor, “We would have expected some measures to promote alternate fuel technologies which would have helped the environment also. We would encourage the government not to just think based on size of the vehicle which has no relation to the technology.” (Reuters photo)

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    Budget 2016: As per today's notification, ambulances, taxis, electric vehicles, including three-wheelers, hybrid vehicles, cars for physically handicapped persons, Hydrogen vehicles based on fuel cell technology are exempted from the levy. (Reuters)

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    Budget 2016: In case of cars for physically handicapped persons, to avail of the exemption the buyer will have to give "an affidavit that he shall not dispose of the car for a period of five years after its purchase". (Reuters)

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