New Delhi, Feb 28 (IANS) In a major move to make environment-friendly hybrid vehicles cheaper, Finance Minister Pranab Mukherjee Monday exempted from customs duty specified parts used in them.
‘It is proposed to grant specified parts of such vehicles full exemption from basic customs duty and special CVD (countervailing duty),’ the minister said in his budget proposals for 2011-12.
Mukherjee also gave another incentive in the form of reduced concessional excise duty from 10 percent to 5 percent.
According to him, the exemption from customs duty would help the hybrid vehicle segment, which is at an initial stage of development in the Indian automobile industry.
Murkherjee also reduced the excise duty on kits used to convert conventional vehicles using fossil fuel like petrol and diesel to hybrid fuels like hydrogen, by five percent.
‘In response to the growing demand for green products… I propose to reduce the excise duty on such kits and their parts from 10 percent to 5 percent,’ he said.
Other existing incentives like customs duty exemption for specified parts of electric vehicles at a concessional central excise duty of four percent would continue during 2011-12.
