2016-17 Union Budget Feb 29,2016 - Cars set to become costly as FM Arun Jaitley proposes infra cess of upto 4%

Car prices, including those of mass market small ones, are set to go up as Finance Minister  Arun Jaitley proposed to levy an infrastructure cess of up to 4 % on various kinds of vehicles

Diesel vehicles would see the highest increase in prices

The Finance Minister proposed a cess of  -

• 1 % on small petrol, LPG and CNG cars

petrol/LPG/CNG driven motor vehicles of length not exceeding 4 meter and engine capacity not exceeding 1200cc would attract a cess of 1 %

• 2.5 % on diesel cars of certain capacity

2.5 percent on diesel driven motor vehicles of length not exceeding 4 meter and engine capacity not exceeding 1500cc and

• 4 % on other high-powered vehicles and SUVs.

higher engine capacity and SUVs and bigger sedans would attract a cess of 4 %

No credit of this cess will be allowed, and credit of no other duty can be allowed to pay this cess, he added.

"The pollution and traffic situation in Indian cities is a matter of concern. I propose to levy an infrastructure cess of 1 percent on small petrol, LPG and CNG cars, 2.5 percent on diesel cars of certain capacity and 4 percent on other high engine capacity vehicles and SUVs," Jaitley said while unveiling the Budget 2016-17 in Lok Sabha