GST On SUVs And Luxury Cars May Raise By Up To 10 Percent

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The expected cess revision could lead to the total levy increasing from 43 percent to as much as 53 percent

The implementation of GST has caused plenty of stir within the automotive industry because it has its pros as well as cons. SUV and high end luxury vehicles have benefitted a lot due to the price reduction prompted by GST while the average buyers did not receive as much as convincing price drops as they would have liked despite the volume segments make for majority of shares.

In a bit to mend what was said to be the “anomaly” while formulating the GST rates for vehicles in luxury section, the central government is now looking at ways to increase the cess. According to recent reports, the reorganization in high-end cess would lead to an increase of up to 25 percent in comparison to the existing 15 percent.


When the revised rates come into act through a new amendment, the total levy could go as high as 53 percent from current 43 percent. The Centre is not just focused on the GST of costly vehicles as some other commodities are subjected to revision as well. It is said that the GST Council’s meet up in Hyderabad next month might lead to a firm conclusion.

We could be knowing the final revision of high-end cars’ GST by then before the Centre having to pass required legislative amendments. It can be noted that a review on the GST for hybrid cars had already been dismissed. It resulted in some automakers making strategic changes to introducing new hybrid variants of existing cars and bringing global hybrid models into the market altogether.

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On the hindsight, it is predicted that increasing the levy on SUVs may settle down the quarrels generated for the profound tax raise on hybrid vehicles. The Centre could compensate the losses endured due to GST in the higher volume segments with the raise of levy in the luxury market. The 28 percent tax and 1 percent cent on small cars as well as 3 percent cess on bikes under 350-500 cc category are set to remain unaltered.