Honda Jazz at the 11th Auto Expo 2012

While the discounts on the Brio And Jazz have helped Honda’s market share from plummeting any faster than it already was, the Central Board of Excise & Customs has directed Honda Cars India to pay an additional Rs. 164 Crores as excise duty for these models, based on the cost of production and not the discounted showroom prices.

This follows the Supreme Court judgement on the Fiat case last year, where the verdict was that if a manufacturer sells a model at loss for a considerable period of time, the excise duty should be based on the cost of production and a reasonable margin of profit.

ET also reports that the industry body CII had spoken to finance minister P. Chidambaram, to take into consideration the reasons for manufacturers selling goods at less than the cost of production. While the excise department has set up a panel to look into the implications of the Fiat judgement, it has has not submitted its recommendations yet.