India Extends Excise Duty Cuts on Vehicles and Capital Goods

Posted by Reading Time: 3 minutes

DELHI – India’s Ministry of Finance (MoF) has officially extended existing duty concessions on several items including vehicles, capital goods and consumer durables to December 31, 2014.

Officially announced in Notification No. 06/2014-Central Excise (dated June 25, 2014), the notification extends duty concessions outlined in Notification No. 12/2012-Central Excise (dated March 17, 2012 and amended via Notification No. 04/2014-Central Excise) for an additional six months.

Key changes in excise duty that will now be extended from Notification No. 12/2012 include:

  • Excise duty on vehicles is reduced as follows:

The excise duty on chassis has also been reduced along with the duty on hybrid and hydrogen vehicles. These changes will be valid until June 30, 2014.

  • Excise on machinery and equipment falling under Chapters 84 and 85 of the Central Excise Tariff is reduced from 12 to 10 percent. This includes washing machines, air conditioners, refrigerators, computers, color televisions, etc. and related components. These changes will also be valid until June 30, 2014.
  • Excise duty on domestic mobile handsets is reduced to between one and six percent, and excise duty on imports is six percent countervailing duty (CVD) in an attempt to spur domestic manufacturing. Mobile handsets will attract one percent excise duty if Central Value Added Tax (CENVAT) benefits are not availed of and six percent if CENVAT is. All imported mobile handsets will now attract six percent  CVD.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Related Reading

Establishing a Business in India
In this magazine, we discuss establishment structures in India, including liaison offices, project offices, branch offices, and wholly owned subsidiaries. We overview each structure in terms of the situations in which it is appropriate, its permissible activities and limitations, as well as its setup and winding up processes, complete with flow charts.

Doing Business in India
Our 156-page business guide to India, the second fastest growing economy in the world, provides a thorough and in-depth analysis of India, its history, key demographics and overviews of the states and union territories highlighting business opportunities and infrastructure in place in each region. A comprehensive guide to investing in India is also included with information on FDI trends, business establishment procedures, economic zone information, labor and tax considerations, as well as an analysis of Indian business etiquette and culture.

India’s 2014 Interim Budget: Regulatory Highlights

Key Aspects of India’s Corporate Social Responsibility Mandate Clarified

PAN Requirements for Foreign Nationals during Company Incorporation