German luxury carmaker slashed pricing of its cars by up to Rs. 7 lakh to pass on benefits of GST
German luxury car manufacturer Mercedes-Benz has slashed the pricing of its made-in-India cars by up to Rs. 7 lakh. The decision has been taken in order to pass on the benefits of GST to the customers. However, the company could revert to the old pricing till the new tax system’s rollout, if GST is deferred.
The German brand current manufactures a total of nine products in India. These include the CLA, sedans like C-Class, E-Class, S-Class and Maybach S500 along with SUVs like GLA, GLC, GKE and GLS. These cars are priced between Rs. 32 lakh and Rs. 1.87 crore (ex-showroom, New Delhi). With the price reduction, these cars will be cheaper between Rs. 1.4 lakh and Rs. 7 lakh. The Maybach S500 gets the highest price reduction of Rs. 7 lakh.
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Mercedes says that with the implementation of GST scheduled from 1st July, 2017, the company now knows more in details about the taxation in various states. The company also reveals that on an average there will be 4% price cut in the total price for all the models manufactured in the country. In the meantime, Audi also slashed pricing of its cars by up to Rs. 10 lakh. This offer is available for a limited period of time till 30th June.
Speaking about the CBU models of the brand, Mercedes-Benz is currently discussing the pricing strategy under GST. Under the new tax structure announced last week, large luxury cars and big SUVs with engine capacity of 1,500 cc or above will draw 15% cess over and above the 28% GST, leaving the total incidence to 43% compared to current tax system’s 50%.
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With this, the luxury cars and big SUVs become much cheaper, while the smaller mass market products become pricier than before, due to the new tax system. In the meantime, GST Council may sit next week to reconsider the steep 43% tax amount on the hybrid cars that has drawn flak from the auto industry majors.
2015 Mercedes-Benz C-Class Gallery