Auto industry wants new govt to rationalise excise structure.

With the UPA voted back to power again, the Indian automobile industry wants the government support to continue for promoting the sector as a key economic driver and asked for removal of differential excise structure for different sizes of vehicles.     

"First and foremost (there should be) no reversal of financial stimulus packages announced over the last six months," Mahindra & Mahindra President, Automotive Sector, Pawan Goenka said.     

He said the government must also "review and amend large differences in excise duty on different sizes of vehicles".     

At present, passenger vehicles above 1500 cc engine size attract additional excise duty ranging between Rs 15,000 and Rs 20,000 over and above the 20 per cent excise they attract.     

Maruti Suzuki India Managing Director Shinzo Nakanishi, who had already stated the government should not hike excise duty, said: "Backed with this verdict I am sure the new government will re-enforce its initiatives to promote the automobile industry as a key economic driver."     

Congratulating the UPA on its decisive victory, Hero Honda Motors Managing Director and CEO Pawan Munjal said: "This mandate will strengthen the hand of the central government to unlock long awaited reforms in multiple sectors for the feel good factor to return to the economy."

Goenka also said the government should focus on demand generation via a series of initiatives suggested by the industry at various times.     

"Reducing the Central Sales Tax (CST) as per the earlier time table announced very important to the industry," he added. The  (CST) is slated to become zero per cent by 2010-11 when the Goods and Service Tax (GST) is expected to come into force.

Nakanishi had earlier said: "I hope the new government continues with the support and there are no excise duty hike. I'll be happy if there is a further excise duty cut."     

The Indian auto industry has been passing through one of the roughest rides in its history with auto sales growing by just about 0.71 per cent last fiscal at 9,723,391 units, thanks mainly to a late surge in the last quarter after the government's stimulus packages.     

SIAM had said that had it not been for the stimulus packages, passenger vehicle sales would have been down three per cent or no growth, while commercial vehicles would have had a decline of 30-40 per cent.