In the Interim Budget, Finance Minister P Chidambaram reduced excise duty on small cars and motorcycles from 12pc to 8pc. There is also a cut to 20pc for large and mid segment cars and 24pc (from 30pc) for SUVs. Commenting on this, Sachin Menon, National Head of Indirect Tax, KPMG in India, said, "Vote on account gave the much needed relief to the capital goods, consumer durables and auto sector at a time when the demand is low. This would spur the demand in the interim provided the benefit is passed on"
"Manufacturing productivity was low for the past few months and with the concessions for capital goods, auto and consumer durables we hope to increase demand and therefore productivity," he added.
The full budget will be presented in July. Among the other highlights of this interim budget are that the 10pc additional surcharge on income tax for those earning above Rs 1 crore -- the "super-rich" tax -- has been extended from FY14 to FY15.
The impact of the excise duty cut is seen at about Rs 10,000-Rs 12,000, according to analysts.
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