Relief to The Manufacturing Sector; Cars and Scooters to be Cheaper Excise Duty on Mobile Handsets to be Restructured

The Union Finance Minister, Shri P. Chidambaram has announced some changes in Indirect Tax Rates. Presenting the Interim Budget 2014-15 here in Parliament today, he said that keeping with the conventions, he does not propose to make any announcements regarding changes to the Tax Laws. However, the current economic situation demands some interventions that cannot wait for the regular budget. In particular, the manufacturing sector needs an immediate boost. Hence, Shri P. Chidambaram proposed the following changes in some Indirect Tax Rates:

1. To stimulate growth in the capital goods and consumer non-durables, Shri P. Chidambaram proposed to reduce 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 can be reviewed at the time of the regular budget.

2. To give relief to the automobile industry which is registering unprecedented negative growth, the Finance Minister proposed to reduce the excise duty 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%

Accordingly, Shri Chidambaram proposed to make appropriate reductions in the excise duty on chassis and trailers.

3. To encourage domestic production of mobile handsets and reduce the dependence on imports, the Finance Minister has proposed to restructure the excise duties for all categories of mobile handsets. The rates will be 6% with CENVAT credit or 1% without CENVAT credit.


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December 2020