Car and Mobile To Get Cheaper - Interim Budget 2014

Presenting the interim budget 2014, The Union Finance Minister, Shri P. Chidambaram, proposed the following changes in some Indirect Tax Rates. He said that the current economic situation needs a immediate boost in the manufacturing sector, so the following changes are being made: 

1.  Capital goods and Consumer Non-Durables

• The excise duty from 12% to 10% on all goods falling under Chapter 84 and 85 of the schedule to the Central Excise Tariff Act for the period up to 30.06.2014. 
• The rates are to be reviewed at the time of the regular budget.

Reason for this proposal: To stimulate growth in the capital goods and consumer non-durables.

2. Automobile Industry:
The excise duty has been reduced as follows for the period up to 30.06.2014:

• (i) Small cars, motorcycles, scooters and commercial vehicles  from 12% to 8%
• (ii) SUVs  from 30% to 24%
• (iii) Large & Mid-segment Cars from 27/24% to 24/20%

Appropriate reductions in the excise duty on chassis and trailers are also proposed. 

Reason for this proposal: This has been proposed to give relief to the automobile industry which is registering unprecedented negative growth. 

3. Mobile Handsets:

• The excise duties for all categories of mobile handsets are to be restructured. The rates will be 6% with CENVAT credit or 1% without CENVAT credit.

Reason for the proposal: This has been proposed to encourage domestic production of mobile handsets and reduce the dependence on imports.