Shares of Mahindra & Mahindra and Tata Motors fell by nearly 2% after finance minister P Chidambaram proposed to increase the excise duty on all sports utility vehicles.
Mahindra & Mahindra lost 1.63% to Rs. 876.75. Tata Motors also fell by 1.78% to Rs. 280.90 on the BSE.
Finance Minister P Chidambaram proposed to increase the excise duty on all sports utility vehicles and hiked the import rates of all luxury vehicles, including super bikes.
"SUVs occupy greater road and parking space and ought to bear a higher tax. I propose to increase the excise duty on SUVs from 27% to 30%. However, the increase will not apply to SUVs registered as taxis," he said during his budget speech.
A sport utility vehicle (SUV) is a vehicle similar to a station wagon or estate car, usually equipped with four-wheel drive for on and off-road ability.
In highly volatile trade, the BSE benchmark Sensex was trading at 19,164.89, up 12.48% in afternoon trade.