After excise tax hike announced in Budget 2012, the Indian auto market seems to have no option to hide because now Maharashtra state government too has shed some kindness on the sector with tax increase on cars from 2% to 4%.
So now in Maharashtra, the state government has imposed a tax hike of 2% on petrol run cars and 4% on diesel fuel based vehicles. However, what’s good is that CNG powered cars will now be available after a tax deduction of 2%. Surely the tax hike on cars will hamper the business of auto dealers in the state, impacting the growth of domestic car market.
This will directly hinder the progress of auto industry and customers are likely to cancel their choice of buying the cars from the state. Also the manufacturers will not be able to enhance the prices of their products after the additional duty hike on ex-showroom price tag of the automobiles. Maharashtra being the center point of business for most of the auto makers will make them experience loss from the state. It appears as if the state is following the footsteps of Andhra Pradesh and Karnataka, the two regions who have already raised the duty on vehicles.
People of the region are the greatest sufferers as they will find new options to buy their car after the raised excise duty by the Maharashtra state government. They may choose to buy cars from dealers outside the state and then go through the procedures of necessary vehicle registration procedure after coming back to the place.
In comparison to buying expensive cars after hiked duty, customers will prefer to spend on the registration of the vehicle after buying the car from other state, because that will stand cheaper for them instead of purchasing the vehicle from Maharashtra. However, people planning to buy a luxury car are left with no options than to buy the vehicle from local dealer; else it will turn out to be an expensive deal.
No matter what this hike holds for customers, surely it will strike the business of many automobile manufacturers, gaining well from the State of Maharashtra.