Expressing concern over the "dramatic" slump in the domestic auto sector, Heavy Industries Minister Praful Patel has pitched for reconsidering the proposed tax on SUVs to help bring in demand.
"We are looking at the issue about SUV tax as the auto industry has seen a very dramatic slump in this year as compared to past few years," Patel said on the sidelines of a conference over the weekend here.
Patel favoured vehicles priced below Rs 10 lakh being exempted from the special utility vehicle (SUV) tax announced in the Budget. The auto industry too is demanding withdrawal of 3 per cent excise duty hike on SUVs introduced in Budget.
The call for review comes in wake of drop in auto sales in the last fiscal. Car sales fell 6.7 per cent to 18,95,471 units, the first contraction in a decade. In the previous fiscal, car sales for the first time crossed 2 million mark at 2,031,306 units.
According to the industry lobby Siam projections, passenger car segment is pegged to grow by 3-5 per cent, while the UV segment is likely to grow 11-13 per cent. "Overall, passenger vehicle sales are estimated to rise by 5-7 per cent in this financial year," Siam said.