The Government on Wednesday extended excise duty concession on automobiles, capital and consumer goods for six months till December 31, 2014.
The excise duty concessions, which were granted in February this year, were to have lapsed on June 30.
In the Interim Budget, excise duty on small cars, scooters, motorcycles and commercial vehicles were cut to 8 per cent from 12 per cent earlier.
The same for SUVs was slashed to 24 per cent from 30 per cent, while on large cars it was reduced to 24 per cent from 27 per cent earlier and mid-sized cars to 20 per cent from 24 per cent previously.
Last year, the auto industry had clocked a turnover of Rs. 4,00,000 crore, while the total investment in the last five years on the sector is to the tune of Rs. 70,000 crore.
India’s automobile industry has been struggling from a prolonged market slump. Car sales in India fell for the second consecutive fiscal in 2013-14 with a drop of 4.65 per cent at 17,86,899 units as compared to 18,74,055 units in the previous fiscal.
In the 2012-13, car sales in India fell 6.69 per cent, which was the first decline in a decade.
Last month car sales in India, however, grew 3.08 per cent snapping two successive months of fall riding on positive sentiments over formation of a stable government at the Centre and lower excise duty in the Interim Budget.