Diesel cars to get costlier in Delhi

Maruti SX4 Diesel

The Delhi budget for 2011-12 has made diesel vehicles costlier in capital, but reduced the levy on bicycles, kerosene stoves, lanterns and sanitary napkins. The budget presented on Tuesday will also make tobacco products, furnishings, suitings and sweetmeats costlier for Delhiites.

The Delhi Government has increased VAT on diesel cars by 25%. The increased VAT will be charged at the time of registration. The VAT application is different for various price points with cars upto Rs. 6 lakhs being charged 5% VAT against 4% earlier, cars between Rs. 6-10 lakhs being charged 8.75 VAT against 7% earlier and cars priced above Rs. 10 lakhs will end up paying 12.5% VAT against the 10% earlier. Every month 10000-15000 Diesel cars are registered in Delhi.

The budget proposed a 25 per cent hike on existing state taxes on diesel vehicles specified in the schedule-I of the Motor Vehicle Taxation Act 2004. While proposing the hike, chief minister Dixit stated, “Many studies have pointed out that in spite of the use of CNG in all public transport vehicles and also by many private vehicles in Delhi, the growing number of diesel vehicles is adding to air pollution.”

This is sure affect the numbers in the NCR that sees the largest numbers of sales in cars every year, accounting for nearly 15 per cent of the total. Of these, about 30 per cent of the cars are diesel-powered with Maruti Swift, Tata Indica and Mahindra Scorpio being the most popular.

Diesel currently cost an approximate 15 per cent more than their petrol counterparts, what with all the taxes and expensive engine technology. Predictably enough, the auto manufacturers have shown their displeasure. While a senior executive from Maruti Suzuki told Economic Times that it won’t be ideal to tax a particular type of fuel, especially one that is gaining popularity, SIAM was more forecul, stating that diesel was not a dirty fuel and that any change in policy would affect consumer sentiments.


Source – EconomicTimes