Budget impact on auto sector     (updated - 07 July 2009)
Auto sector has to contend with the reduction in excise duty on vehicles that were left out in the three-stimulus package announced in 2008-09.

The Union Budget 2009-10 has cut the excise duty for petrol trucks to 8% from 20%. In addition, the ad valorem (duty by value) duty on cars and sports utility vehicles of engine capacity equal and above 2,000cc has been reduced by Rs 5,000/unit to Rs 15,000, auguring well for vehicle manufacturers.

In addition, the budget has further provided for a more level playing field between road freight and other modes of transport (including coastal shipping and railways) by applying a uniform service tax rate.

This will reduce the incremental disadvantage in pricing faced by road freight operators. Overall the Union Budget 2009-10 is marginally positive for the sector.

Budget Impact on Auto Sector               

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