new delhi with automobile sales entering positive territory in november and the government under pressure to raise revenues excise duty concessions to the automobile sector may not continue beyond december 31 the thinking in the finance ministry is that revenue considerations may leave the government no alternative but to let the sops expire on december 31 said officials familiar with the matter the upa government had cut excise duty by up to six percentage points to revive demand in the interim budget presented in february the narendra modiled government subsequently extended the sops which were to expire on june 30 till december 31 we are examining the issue there are a lot of factors being looked at said a senior government official pointing to a modest improvement in auto sales numbers the move is sure to be opposed by automobile manufacturers who say the industry is still struggling while officials are ready with their arguments the final decision will be a political one the auto industry has posted 10 growth in the first eight months of the fiscal primarily on the back of a 12 jump in twowheeler sales though the critical commercial vehicles segment a barometer of demand in the wider economy saw sales decline by 727 passenger vehicles cars suvs grew 268 and threewheeler sales rose 14 during the first eight months the finance ministry is leaning towards scrapping the concessions as indirect tax revenues grew by just 71 in aprilnovember to rs 328 lakh crore well short of the targeted 20 growth indirect tax revenues have been very disappointing and there is a case for revisiting these sops said another government official adding that revenue considerations have become crucial as the government cannot allow any slippage in the fiscal deficit target in the overall interest of the economy another reason for reversing the duty cuts is that the reduction in excise for some segments has created a peculiar problem of inverted duty inputs attracting higher duty and the final product lower duty leading to accumulation of input credit automakers for their part are pressing hard for continuation of the excise duty benefits beyond december arguing that other macroeconomic factors such as interest rates around 75 of cars are sold through finance are quite high and they are being forced to dole out high discounts to stimulate sales the excise duty package has helped the industry break even on sales and avoid a third year of decline the extension of benefits has not yielded the desired results as consumer sentiment is still weak though it has helped increase demand and become positive after fy12 said a senior executive of a leading car company the industry has also pointed out that recovery has been selective in case of cars only maruti suzuki hyundai and honda have shown consistent growth while for commercial vehicles only bharat benz has grown in the current fiscal the rise in twowheeler sales is on account of hero motocorp honda motorcycle