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In an unexpected bounty for the automobile industry, finance minister P Chidambaram today slashed excise duties for small cars, two and three wheeler vehicles...

In an unexpected bounty for the automobile industry, finance minister P Chidambaram today slashed excise duties for small cars, two and three wheeler vehicles and also on chasis for buses from 16 to 12 per cent. While duties on buses and two wheelers were expected to be reduced, the cut on small cars took everybody by surprise. However, differences within the industry resurfaced as excise duties on big cars saw a reduction by only 2 per cent (24 to 22) courtesy the 2 per cent cut on CENVAT and the difference in duty structure between the two segments has become even more pronounced.

“It is a very positive budget for us and there is a definite thrust for small cars and two wheelers. It also addresses the issue of public transportation and the excise duty cut in buses is welcome,” said Society for Indian Automobile Manufacturers director general Dilip Chenoy.
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