Budget Expectations

 Retain current excise duty of 10% on small cars, two wheelers and commercial vehicles.

 Bring down customs duty of 110% on imported cars Extending additional incentives on green cars

 Correction in the inverted duty structure for imported rubber and rubber products

 Retain or lower excise duty of 22% plus Rs 15000 on Utility Vehicles What the budget does

 National Mission for hybrid and electric vehicle to be launched.

 Central Excise Duty to be maintained at standard rate of 10%.

 Reduction in excise duty on kits used for conversion of fossil fuel vehicles into hybrid vehicles.

 Specified parts of hybrid vehicles granted full exemption from basic customs duty and special CVD. In
addition, a concessional rate of excise duty of 5% is being prescribed to incentivise their domestic
production.

IMPACT ON SECTOR

■ Maintaining the central excise duty at 10%

is a big relief for the industry. Prices of cars

to remain unaffected

■ No change in the duty structure on diesel ve-

hicles as per the Parikh Committee's recom-

mendation, which again is in favour of the

auto industry

■ More incentives on the production of hybrid

vehicles will boost the production of these

vehicles

■ Owing to revision of income tax slabs, peo-

ple will have more disposable income

■ The sector will be indirect beneficiary of ru-

ral and infrastructure spending as well

IMPACT ON COMPANIES

■ Currently Bharat Forge and KPIT Cummis

are jointly developing kits for hybrid vehi-

cles. Reduction in excise duty on kits used

for conversion of fossil fuel vehicles into hy-

brid vehicles will boost such initiatives.

■ Current surcharge of 7.5% on domestic com-

panies proposed to be reduced to 5% will

boost domestic automobile manufacturing

companies.

■ Positive for M&M which is making electric

vehicles

■ Will benefit auto ancillary companies like

Exide Industries making hybrid batteries