NEW DELHI: Get set for a cheaper XUV500 SUV from Mahindra & Mahindra as the company has reduced the ground clearance of the vehicle to avail lower excise duty. The ground clearance, which was 200mm earlier, has been cut to 160mm, giving the company a 3% savings in excise duty on the vehicle.
"The price of the XUV500 will go down by between Rs 27,000 and Rs 33,000 as we produce the vehicle with the new specifications," Pawan Goenka, president of Mahindra & Mahindra, told TOI.
The government had announced in the Union Budget earlier this year that SUVs having engine capacity of over 1,500cc and ground clearance upwards of 170mm will have to pay an excise duty of 30% against 27% before. While the government justified the higher duty on the "greater road and parking space" the vehicles occupied, many in the industry cried foul over the move as only a section of vehicles fell within the definition that slapped higher duty. The maximum brunt of the new definition was borne by domestic companies like Mahindra & Mahindra and Tata Motors. Companies have now started making changes to their existing line-up so that they fall in the lower-
duty bracket.
"The price of the XUV500 will go down by between Rs 27,000 and Rs 33,000 as we produce the vehicle with the new specifications," Pawan Goenka, president of Mahindra & Mahindra, told TOI.
The government had announced in the Union Budget earlier this year that SUVs having engine capacity of over 1,500cc and ground clearance upwards of 170mm will have to pay an excise duty of 30% against 27% before. While the government justified the higher duty on the "greater road and parking space" the vehicles occupied, many in the industry cried foul over the move as only a section of vehicles fell within the definition that slapped higher duty. The maximum brunt of the new definition was borne by domestic companies like Mahindra & Mahindra and Tata Motors. Companies have now started making changes to their existing line-up so that they fall in the lower-
duty bracket.
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