By TIOL News Service

NEW DELHI, JUNE 25, 2014: KEEPING in mind the sagging demand scenario in the economy, the Modi Sarkar today decided to extend the excise duty sops given to the Sector in the Interim Budget which was valid up to June 30. While addressing the media the Finance Minister said that the duty benefits are being extended for six months up to December, 2014. The notification in this regard has been issued.

The Finance Minister said that the Government expects the industry to show positive results in the coming months. He said that the Government also expects that the benefit of these duty concessions will be passed on to the consumers at large.

In February 2014, the Government had reduced the excise duty on:

• Small cars, motorcycles, scooters, three wheelers and commercial vehicles from 12% to 8%;

• Mid-segment cars from 24% to 20%;

• Large cars from 27% to 24%; and

• SUVs from 30% to 24%.

Likewise, to stimulate growth in the capital goods and consumer durable sector, excise duty was reduced from 12% to 10% on all goods falling within Chapters 84 & 85 of the Central Excise Tariff.

However, despite duty cuts, auto-sales have not picked up during March-April, 2014, although some positive signs could be seen from the sales figures of May 2014. Sales of capital goods and consumer goods continue to be sluggish.