Millennium Post

Day after excise duty sops’ withdrawal, auto scrips skid

Auto stocks witnessed selling pressure on Wednesday after the government announced ending excise duty concessions for the cars and durable goods.

Mahindra & Mahindra fell by 1.85 per cent, Eicher Motors was down 1.63 per cent on the Bombay Stock Exchange (BSE).

Shares of Bosch declined by 1.33 per cent, Exide Industries (-0.78 per cent), Bajaj Auto (-0.66 per cent) and Maruti Suzuki India (-0.63 per cent).

Prices of cars and durable goods like TV and fridge will go up from Thursday as government plans to end the excise duty concessions given in February, a decision that may help rake in Rs 1,000 crore in the remaining three months of the fiscal.

"The government is not extending the excise duty concessions on the auto sector and consumer durables," a senior finance ministry official had said on Tuesday. Excise duty on small cars, scooters, motorcycles and commercial vehicles was reduced to 8 per cent from 12 per cent previously. For SUVs, it was cut to 24 per cent from 30 per cent; for mid-sized cars, to 20 per cent from 24 per cent and to 24 per cent for large cars, from 27 per cent.

In June, the new government led by Prime Minister Narendra Modi extended the excise duty concessions by 6 months to December 31, which is now not being further extended.
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