Budget 2015: Vinay Khattar’s take on roll-back of excise duty on automobile industry

With the onset of the Union Budget 2015-16, the automobile industry is hoping that the Finance Minister, Arun Jaitley will roll-back the excise duty in order to spur the demand. On the Budget expectations on auto sector, Vinay Khattar, Associate Director and Head of Research, Edelweiss said: “As the Union Budget 2015-2016 is about to be presented, the Society of Indian Automobile Manufacturers (SIAM) is hoping that the Finance Minister will roll-back the excise duty so as to buoy automotive sector demand. The excise duty cut which was initially implemented on February 2014 across all vehicle classes was prolonged till December 2014 by the FM in the interim budget last year and was finally rolled back as of January 2015. The excise duty hike has roughly translated into a 4%-6% price hike across different vehicular categories which could have an adverse affect on demand.”
Vinay Khattar
With regards to the tyre industry, Khattar added: “The tyre industry has called for removal anti-dumping duties on the import of raw materials like rubber chemicals (Butyl Rubber SBR grade 1500/1700) which are not manufactured in the domestic market and Carbon Black as well as levy of anti-dumping duties on imported Chinese tyres. The high import duty on rubber raw materials makes it all the more cumbersome for the domestic tyre industry to compete against imported finished Chinese tyres which are not subject to such high duty rates.”

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