Under the GST, luxury cars will draw 15% cess over and above the 28% GST leading to the total tax incidence of 43%
This is probably the best time for those customers who have been dreaming of buying luxury car. German luxury auto majors like the Mercedes-Benz and BMW are offering great cash discounts on their cars and Audi is also following the same path. The Volkswagen owned luxury car brand has slashed pricing of its entire portfolio by up to Rs. 10 lakh.
The company’s entire range of cars is expected to get a whooping cash discount in order to pass on the benefits of the GST that is to be rolled out from 1st July this year. Currently, the brand offers various products ranging from A3 sedan to R8 sports coupe. Pricing for the German brand ranges between Rs. 30.50 lakh and Rs. 2.55 crore (ex-showroom, New Delhi).
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With the cash discount expected to be offered, the Audi A3 sedan gets cheaper by Rs. 50,000 to Rs. 1.5 lakh, while the A8 premium sedan draws Rs. 10 lakh discount. However, this discount is offered for a limited period of time till 30th June.
As we already reported that luxury cars are benefitted under the new Goods and Services Tax (GST), they attract 15% cess over and above the 28% GST leaving the total incidence to 43%. In comparison, the luxury cars now have to pay a total tax amount ranging between 44.5% and 51.5% under the current tax structure. This means, under GST luxury cars are at least 1.5% cheaper compared to the current pricing.
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With the GST implemented, mass market products like small cars become higher priced compared to their current pricing, while the large cars, luxury cars and SUVs benefit from the new tax system. Now, it is to be seen if Audi continues offering the products at reduced pricing after GST rolls out on 1st July or it changes the pricing again after 30th June.
Audi Q8 Concept Gallery
