Regulars here might remember that we have been reporting in detail about govt’s idea of imposing taxing diesel powered passenger vehicles sold in the country. While nothing concrete has happened on this yet, Indian automakers have come up with an alternative plan that speaks about dual pricing policy for the stickier fuel and a 1% increase in the price of diesel.
PM Telang of Tata Motors, Pawan Goenka of Mahindra & Mahindra, Shinzo Nankanishi of Maruti Suzuki and Arvind Saxena of Hyundai Motors India recently met senior finance ministry officials to voice their opinion against petroleum ministry’s ideo of imposing additional taxes on diesel vehicles.
“If you impose 5% additional tax on diesel cars, the government will garner merely Rs. 2,500 to Rs. 6,000 crore… a 1% increase in diesel price will yield Rs. 6,000 crore,” Geonka told reporters. It may be noted that diesel powered utility vehicles account for as much as 99% of M&M’s total sales.
“Additional duty on diesel cars will kill demand,” he said.
Auto makers are of an opinion that diesel powered vehicles employed for personal usage consume only 1.6% of total diesel sold in the country and finance ministry’s recommendation to implement the additional taxation on diesel cars will make things worse for both manufacturers and consumers.