Finance minister P Chidambaram has proposed a hike in customs duties on imported luxury cars to 100 percent, up from 75 percent, while that for motorcycles higher than 800cc, from 60 percent to 75 percent.
The Budget has also proposed a higher excise duty on some SUVs from 27 percent to 30 percent, except for those registered as taxis.
The move is expected to further boost the efforts of luxury carmakers to assemble cars in India, a process that began last year when custom duties on CBU were hiked. This is expected to push up prices for cars imported as CBUS by carmakers like Mercedes-Benz, Audi, BMW, Volvo and JLR.
The Budget has also extended sops for imported parts for electric vehicles till the financial year 2014-15.