10-Feb-2012

Car Manufacterers Pushback Against Diesel Car Tax


Terming the calls for imposing additional tax on diesel vehicles as “retrograde”, homegrown auto major Mahindra & Mahindra today said such a move will only further impede growth of the industry which has had a difficult year in 2011.
Reacting to issues raised from various quarters over usage of subsidised diesel fuel for “luxury” and seeking imposition of additional tax to the tune of Rs 80,000 on diesel cars, the company said use of diesel fuel for luxury personal vehicles is less than 0.2 per cent.
“In my opinion to consider an additional tax on diesel vehicles is a retrograde step...” Mahindra & Mahindra President (Automotive and Farm Equipment Sectors), Mr Pawan Goenka, said.
Urging the government not to consider such a move, he said: “In the upcoming Union Budget, this is perhaps the most critical item for the automotive industry which will have a significant impact on the growth of the industry in the upcoming fiscal year.’’
Explaining why such a move would prove counter-productive, Mr Goenka said: “A tax on diesel vehicles will further impede growth of the industry which has had a difficult year in 2011.’’
Of course, the industry estimate of the percentage of diesel used by diesel cars is flawed :Press Release: CSE trashes contention that diesel use by cars is very low.  Got to keep those profits rolling in.

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