SUV Tax on cars below Rs 10 lakh should be reconsidered: Patel

Heavy industries and public enterprises minister Praful Patel today favoured vehicles priced below Rs 10 lakh being exempted from the 'SUV-tax' announced in this year's Budget.

Heavy industries and public enterprises minister Praful Patel on Thursday favoured vehicles priced below Rs 10 lakh being exempted from the 'SUV-tax' announced in this year's Budget.

Supporting the automobile industry's demand for having a re-look at the increase of excise duty to 30% from 27% earlier on SUVs, he said: "I certainly feel there is a need to look at the excise duty on SUVs. To begin with, there is no classification of SUV the Motor Vehicles Act."

Speaking on the sidelines of the Hero Mindmine Summit, he said the "SUV tax" has hurt vehicles like "Sumo and Bolero, which are used in rural areas to transport people."

Stating that he has taken up the matter with finance minister P Chidambaram, Patel said: "I suggested that any vehicle below Rs 10 lakh may be brought out of the definition."

He said the objective must be to "disincentivise people who use high end cars" and for them "not to be subsidised by cheap diesel."

Patel said the automobile industry has "merit and justification" in seeking a re-look at the higher tax on SUVs.