Honda cuts car prices as central sales tax lowered

WHILE most automakers in the country are hiking prices, Honda Siel Cars India said on Sunday it is cutting the rates of its sedans, City and Civic, by up to Rs 5,000 with immediate effect on account of the reduction in central sales tax (CST) by the government.

“We have received notification from the government on the central sales tax cut from three to two per cent announced in the Budget. Hence, we are reducing the prices of our models City and Civic to pass on the benefit to consumers,” aHonda Siel Cars India official said. While mid- sized sedan, City will be cheaper by Rs 3,000, Civic will be cheaper by Rs 5,000.

Before the cut, City was priced at between Rs 6.80 lakh and Rs 8.65 lakh, while Civic cost between Rs 10.91 lakh and Rs 12.41 lakh. The official, however, said the price of the companys sports utility vehicle Honda CRV will remain unchanged.

In fact, CST was proposed to be reduced to two per cent from April 11, but it could not be done due to differences between the Centre and states over acompensation package for states for revenue loss due to the cut. The auto industry has been reeling under increasing input costs. Last month, Maruti Suzuki India Ltd had hiked prices its models.