Top Indian car maker Maruti Udyog Ltd said on Wednesday it would raise prices of its vehicles from March 15, after the government said it would impose an additional tax levy to raise funds for education.
In its budget for the fiscal year starting on April 1, the government said it would impose a levy of 1 per cent on all taxes to fund secondary and higher education, in addition to the existing 2 per cent levy which raises funds for basic education.
Maruti, a unit of Japan's Suzuki Motor Corp, said the new levy was the reason for the price rises.
It said it was not raising prices immediately so consumers could buy cars at pre-budget prices, but did not specify the extent of the increase or say which models it would apply to.
"In the run-up to the budget, there was speculation that certain taxes or duties may come down," Maruti said in a statement, referring to an expectation that excise duty on passenger vehicles might have been cut.
"Owing to that, several customers postponed purchase of new cars till after the budget. In light of this, the company has decided to defer the hike to allow these customers to purchase cars at pre-budget prices," it said.
Maruti, which makes the popular Alto and Swift hatchbacks, last raised prices on some of its models by up to Rs 12,000 on Feb 1 to help offset higher costs.
Shares in Maruti ended down 5.4 per cent at Rs 839.70 in a Mumbai market that fell 4 per cent. The news of the price rises was released after the market close.
In its budget for the fiscal year starting on April 1, the government said it would impose a levy of 1 per cent on all taxes to fund secondary and higher education, in addition to the existing 2 per cent levy which raises funds for basic education.
Maruti, a unit of Japan's Suzuki Motor Corp, said the new levy was the reason for the price rises.
It said it was not raising prices immediately so consumers could buy cars at pre-budget prices, but did not specify the extent of the increase or say which models it would apply to.
"In the run-up to the budget, there was speculation that certain taxes or duties may come down," Maruti said in a statement, referring to an expectation that excise duty on passenger vehicles might have been cut.
"Owing to that, several customers postponed purchase of new cars till after the budget. In light of this, the company has decided to defer the hike to allow these customers to purchase cars at pre-budget prices," it said.
Maruti, which makes the popular Alto and Swift hatchbacks, last raised prices on some of its models by up to Rs 12,000 on Feb 1 to help offset higher costs.
Shares in Maruti ended down 5.4 per cent at Rs 839.70 in a Mumbai market that fell 4 per cent. The news of the price rises was released after the market close.
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