The Revenue Department has announced that the Maruti Suzuki SX4 and the Toyota Corolla Altis will now bear an excise duty of 27 per cent rather than the previously announced 30 per cent. The models were previously taxed based on the SUV bracket though they were technically sedan models.
As part of the previous budget the government had announced three criteria to define SUVs; 1500cc engine or above, 4m or above in length, 170mm or more of ground clearance. A number of sedans fell in this category and were thus taxed at 30 per cent based on the rule. The CBEC has now cleared this discrepancy by stating that the above mentioned cars which are known as sedans will attract the excise duty of 27 per cent as applicable to large segment cars.
This will come as a relief to the car manufacturers as the current economic turmoil has heavily affected the auto industry and ironically, the sedan segment market share has reduced by 4 per cent over the past month while the SUV segment has managed to maintain its market share.