Auto stocks fall up to 5 per cent over infrastructure cess

By: | Published: February 29, 2016 10:06 PM

Auto stocks, led by Maruti Suzuki, fell as much as 5 per cent today, on concerns that car prices are set to go up as Finance Minister Arun Jaitley decided to levy 'infrastructure cess' of up to 4 per cent. Shares of Maruti fell by 4.88 per cent to Rs 3,242.60 on BSE.

Car prices are set to go up, ranging from Rs 2,000 on mass market vehicles to over Rs 1 lakh on big diesel SUVs and sedans as Jaitley decided to levy 'infrastructure cess' of up to 4 per cent. (Reuters)Car prices are set to go up, ranging from Rs 2,000 on mass market vehicles to over Rs 1 lakh on big diesel SUVs and sedans as Jaitley decided to levy ‘infrastructure cess’ of up to 4 per cent. (Reuters)

Auto stocks, led by Maruti Suzuki, fell as much as 5 per cent today, on concerns that car prices are set to go up as Finance Minister Arun Jaitley decided to levy ‘infrastructure cess’ of up to 4 per cent. Shares of Maruti fell by 4.88 per cent to Rs 3,242.60 on BSE.

Among others, Tata Motors declined by 0.65 per cent and Mahindra & Mahindra went down by 0.23 per cent.

Car prices are set to go up, ranging from Rs 2,000 on mass market vehicles to over Rs 1 lakh on big diesel SUVs and sedans as Jaitley decided to levy ‘infrastructure cess’ of up to 4 per cent, a move that made industry players fume.

Singling out diesel vehicles, in the aftermath of pollution problems in the national capital, Jaitley decided to impose 2.5 per cent cess on diesel vehicles of length not exceeding 4 meter and engine capacity not exceeding 1,500cc, while higher engine capacity and SUVs and bigger sedans were slapped a cess of 4 per cent on the value of the car.

These are over an above a cess of 1 per cent on petrol/LPG/CNG driven vehicles of length not exceeding 4 meter and engine capacity not exceeding 1,200cc.

Reacting to the proposals, Maruti Suzuki Chairperson RC Bhargava told PTI: “Obviously it will lead to rise in car prices. It came as a surprise for us as we were not expecting such kind of a cess.”

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