Cars to get costlier as government rolls back excise duty cuts from New Year

2014 was a difficult year for car companies to begin with. The auto industry in general was witnessing a slump in sales and a stimulus was needed to push the cars out of the showrooms. The then UPA government, decided to give concessions on excise duties to bolster the dwindling motorcar sales.

Hyundai Elite i20

Snap back to the present with the four-wheeler industry posting a mild recovery and manufacturers coming out with record sales and profits, the government has decided not to extend the benefits in to the New Year. So, come 2015 and new car buyers will have to shell out some more for owning their pride and joy. The excise rates will go back to their previous original levels; which means that small cars will attract 12% instead of the current 8%; mid-size sedans consisting of players such as the Honda City, Hyundai Verna and the recently launched Maruti Ciaz will be dearer by 4% going up to 24% from the current 20%; large cars including luxury wheels from the likes of the German trio will see their prices hiked by 3% from the current 24% to 27%; the biggest hit however, will be taken by the most popular SUV segment – cars falling in this bracket will see a dramatic increase in MRP owing to the 6% hike, taking the excise duty figure to 30%.

Mercedes-Benz C-Class new

Some car manufacturers have already increased their prices and some are contemplating the move. The hike in prices is solely at the manufacturer’s discretion but the change in excise duty will affect all the companies. The change will increase prices starting from Rs 50,000 and going up all the way to Rs 5 lakh for the high-end models. This decision by the Modi-led government is bound to have a negative impact on the automotive sector which was showing some signs of recovery in the past couple of months.

How do you feel about this price hike? Feel free to vent your frustration in the comments below.


3 thoughts on “Cars to get costlier as government rolls back excise duty cuts from New Year

  1. I was curious as to why new auto sales were so robust for 2014. Now I learn that the Excise Taxes on new autos were rolled back in 2014. Either I somehow missed this revelation or it was mentioned little or not at all by the media. This is something that they and the current administration would prefer to keep ‘under wraps’ as much as possible. If word got out that LOWERING taxes was actually a good thing, it would NOT look good for them OR their policies. Also, I’ll bet that the total excise taxes collected for new auto sales in 2014, after the rates were LOWERED, were actually MORE than the previous year! Unfortunately, a result like that usually has little or no bearing on the future policies of Liberal politicians.


    • Thank you for taking time out to visit my blog. This particular article is pertaining to India and not US. We have had a change of government over here which has rolled back the excise duty cuts given by the previous government to the automotive industry; this article covers that aspect. Hope that you will continue to visit the site. Appreciate your support and comments.


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