The Petroleum Ministry has pitched for additional excise duty on diesel vehicles.
The Petroleum Minister, Mr S. Jaipal Reddy, while dismissing any talks about immediate revision of diesel retail prices told mediapersons here that “Our Ministry has recommended it to the Finance Ministry. It is for the Finance Ministry to consider it.”
Early this week Finance Ministry officials had met auto sector representatives. The auto sector has been opposing this proposal.
“We will again press for not levying the taxes. We will be submitting a report to the Finance Ministry on Monday to oppose the additional levy on diesel vehicles,” Joint Secretary in the Department of Heavy Industries, Mr Ambuj Sharma, said at an auto industry event here.
The Finance Ministry has been considering levying additional levy on diesel vehicles. Diesel, which is sold at a controlled price leads to misuse.
The automobile industry is opposed to such a proposal saying such a move will hurt the industry, which is already reeling under a slump and future investments could also be hurt. At present, excise duties on passenger cars range between 12 per cent and 27 per cent.
Mr Michael Boneham, President and Managing Director, Ford India, said “Long-term investment decisions are predicated on and require stable government policies. Short-term, reactionary decisions are not conducive to growth in any industry, especially the automotive industry which generates significant employment and economic impact.”
“If an additional tax on diesel cars is imposed it will make it harder for all automakers to justify future investments and, thus, employment generation…policies like the diesel tax do not make it easy for us to remain optimistic about the overall business environment in India,” he said.
Former Petroleum Minister and BJP leader, Mr Ram Naik, said it was possible for the UPA Government to reduce the petrol prices by reducing the import and excise duties.