Excise duty on 2 wheelers, cars slashed to 12 pc

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New Delhi, Feb 29: In a major relief for the flagging sales in the two wheeler segment, Finance Minister P Chidambaram in his budget speech today said excise duty on two wheelers has been reduced from 16 per cent to 12 per cent even as he reduced the excise on small cars to a similar level.

Two years ago, the finance minister cut the excise tax on small cars by a third to 16 per cent while for larger cars it remained at 24 per cent. Today, he slashed it further to 12 per cent. In January this year the two-wheeler sales continued to slip with sales of 605,455 units compared to 680,014 in the same month last year, an 11 per cent decrease. Though car Sales in January increased by 8.99 per cent to 113,899 units, it was helped mainly because of Hyundai's i10 sales.

To promote green technology, government also revised the rate on hybrid cars from 24 per cent to 14 per cent.

Buses and their chassis faced a excise cut to 12 per cent from the 16 per cent earlier while three wheeler excise rates now stands at 12 per cent from the earlier 16 per cent.

The industry had called for an 8 per cent reduction in the excise duty on buses as a measure to improve public transportation in the country.


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