Govt notifies tax concession, to make cars, cement cheaper

NEW DELHI: Government today notified 4 per cent across-the-board cut in excise duty which would make cars, consumer products, steel and cement cheaper while the exchequer would forgo Rs 8,700 crore as revenue during the remaining part of the current fiscal.

The three slabs of excise duty- 14 per cent, 12 per cent and 8 per cent, applicable to non-petroleum products have been reduced by 4 percentage points each, an official release said today.

The revised rates will be 10 per cent, 8 per cent and 4 per cent respectively.

Besides, the government also announced other tax breaks for exports and iron and steel sectors.

All the tax concessions will be effective today, it said, adding that the changes in excise and customs duty rates will stimulate demand and provide relief to the manufacturing sector.

Giving details of the tax concession, the statement said that the ad-valorem component of the excise duty on cars of 1,500 cc and above will be reduced from 24 per cent to 20 per cent.

Following the decision, the country's largest car manufacturer Maruti Suzuki Ltd has decided to cut down car prices by up to four per cent.

In the case of cement, which attracts 12 per cent, the specific rates have also been reduced to 8 per cent.

Further, the concessional rates for cement produced by mini-cement plants have also been reduced proportionately, it said.