The Indian government has declared that the current excise duty structure for cars will remain the same till end of 2014. Under the previous government, the excise duties had been slashed from 12 per cent to eight per cent for cars under 4-metre with petrol engine capacity less than 1.2l and diesel under 1.5l. On SUVs, the duties were brought down from 30 to 24 per cent. However, auto manufacturers maintain that despite the change, the response from car buyers does not meet their expectations.
Many new models were launched since the revised excise duty structure was introduced and car makers say that this, to an extent, has helped propel sales. The current government is likely to implement the scrappage policy, which would prohibit cars of manufacturing date older than 15 years from plying on roads. This, carmakers hope, will help the new models find buyers.