So the Prudent Government of India is planning to impose a Special Tax on diesel cars. An additional levies of Rs. 1,70,000 on small diesel cars and Rs. 2,55,000 on medium and large diesel cars like sedans and SUVs. They say that this move is to check the ‘Dieselisation’ of the economy, driven by wide difference between Petrol and Diesel Prices.
According to a Government Official, “The oil ministry has asked the finance ministry to impose additional excise duty on diesel cars and the matter is under consideration”.
However, Oil Ministry Officials confirmed that its proposal to impose tax on diesel cars was ‘favourably’ considered, and the money raised by this, could be used to meet part of the under-recoveries revenue losses of state oil firms in selling fuels below market rates.
As a fact, Diesel is 74 per cent cheaper than Petrol and Diesel cars are 30 per cent more fuel efficient than petrol cars. So, despite being costlier than petrol cars, diesel car sales were boosted over 55 per cent of the total 1.63 Lakh units sold in May this year, up from 38 per cent in May, 2011. Though car makers aren’t appreciating this proposal as they assume imposing more taxes will drastically slow down the demand. Car sales have already slowed down with only 3 per cent growth in the first two months of this fiscal. The primary reason for this being the ever-rising fuel prices, supported by hike in excise duty by the future proof Government of India.
Mr. S. Nakanishi, MD, Maruti Suzuki, said: “Sale of new cars is already slowing. We have cut production of our petrol models in tandem with the changing market dynamics, and any tax on diesel cars would further taper off demand”.
News Source: Economic Times