Excise duty on diesel cars likely to be raised in Budget

Despite frantic lobbying by the automobile industry, the Government is likely to hike the excise duty on diesel cars in the next Budget. While the Petroleum Ministry has been asking for some sort of check on diesel cars with a view to capping the burgeoning demand for diesel, the Heavy Industries Ministry has been opposing this. Now, the Heavy Industries Ministry, the nodal ministry for the automobile sector, is learnt to have indicated its support for increasing the excise duty. This will be bad news for the automobile sector, as the soaring demand for diesel cars has been helping to prop up sales volumes, even as sales of petrol variants have taken a hit after the recent surge in fuel prices. What's more, the industry's demand for reduction of duty on bigger cars (engine capacity of more than 1,200 cc for petrol and 1,500 cc for diesel) is also unlikely to be accepted.

Source : The Hindu Businessline