New Delhi: In a relief to car buyers, Finance Minister Arun Jaitley on Wednesday said the excise duty cuts that were implemented by the earlier government in February have been extended till December 31, 2014.
The excise duty cut was set to expire on June 30. After the announcement auto stocks were trading 1 percent up, while the Sensex and the broader Nifty were trading flat. Maruti Suzuki share were trading 3 percent up.
The same for SUVs (sports utility vehicles) was slashed to 24 percent from 30 percent, while on large cars it was reduced to 24 percent from 27 percent earlier and mid-sized cars to 20 percent from 24 percent previously.
Jaitley said the extension is expected to help India's ailing economy. The auto industry has been grappling with prolonged slowdown. Car sales in India fell for the second consecutive fiscal in 2013-14 with a drop of 4.65 per\cent at 17,86,899 units as compared to 18,74,055 units in the previous fiscal.
In 2012-13, car sales in India fell 6.69 percent, which was the first decline in a decade. India's economy is witnessing the worst slowdown in 25 years, after it grew at sub-5 percent for the second year in a row in 2013-14.