Auto stocks fall up to 5% as FM proposes infra cess

MUMBAI: Auto stocks fell by up to 5 per cent today after Finance Minister Arun Jaitley proposed to levy an infrastructure cess of up to 4 per cent on various categories of vehicles.

Shares of Maruti Suzuki India fell by 4.76 per cent to Rs 3,246.55 -- its 52-week low on BSE.

Among others, Tata Motors went down by 3.88 per cent and Mahindra & Mahindra fell by 1 per cent.

In the Budget for 2016-17, the finance minister proposed a cess of 1 per cent on small petrol, LPG and CNG cars, 2.5 per cent on diesel cars of certain capacity and 4 per cent on other high-powered vehicles and SUVs.

Jaitley also proposed "to collect tax at source at the rate of 1 per cent on purchase of luxury cars exceeding value of Rs 10 lakh and purchase of goods and services in cash exceeding Rs 2 lakh."

"The pollution and traffic situation in Indian cities is a matter of concern," Jaitley said while unveiling the Budget 2016-17 in Lok Sabha today.

Providing details, he said petrol/LPG/CNG driven motor vehicles of length not exceeding 4 metres and engine capacity not exceeding 1,200cc would attract a cess of 1 per cent.