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SUVs above four-metre in length will see a massive cess hike of 7 percent while luxury cars will witness an increase of 5 percent

Despite the revised cess rates, much to the relief of the volume segment players, the smaller cars with petrol engines of upto 1,200 cc and diesel of upto 1,500 cc won’t see any changes in pricing. They stay put at 43 percent – 28 percent GST and 15 percent cess – but the mid-sized and larger segment cars will face the consequences from tomorrow.

The GST council has created a new midsize segment with GST rate of 45 percent – 28 percent GST in addition to 17 percent cess. Moreover, the luxury non-SUVs have been given a separate segment with GST rate of 48 percent – 28 percent GST plus 20 percent cess. The biggest impact can be felt at the SUV space as the vehicles with more than four metres length are slapped with 50 percent – 28 percent GST and 22 percent cess.

Category         Old GST       New GST
Sub 4-Metre VehiclesPetrol less than 1.2-litre (29%),No change
Sub 4-Metre VehiclesDiesel less than 1.5-litre (31%),No change
Sub 4-Metre VehiclesPetrol more than 1.2-litre & diesel more than 1.5-litre (43%)No change
Above 4-Metre Cars43%45% or 48% (luxury non-SUVs)
SUVs Above 4-Metre Long43%50%
Hybrid Vehicles43%43%
EVs12%12%

The cars stretching over four metres in length will see the rates up by 2 percent – from 43 percent to 45 percent. The luxury cars will witness an increase of 5 percent (to 48 percent) while the Goods And Service Tax rates for SUVs jumped by a massive 7 percent (to 50 percent) as mentioned above. It is important to be than any SUV stretching above four-metre is included in the higher cess range.

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However, the new midsize segment and cars coming under luxury space as per the council have not been clearly specified. Initially, the Union Cabinet proposed a drastic hike in cess for luxury vehicles. At least, it did not come into effect but still the increase in GST rates has disappointed the automakers in the premium and luxury scale.

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It is considered to have a hefty impact on the festive season sales and according to Mercedes-Benz India’s, Managing Director and CEO, Roland Folger, the increase overlooks the contribution the German brand makes for the auto industry and the economy. He further said, it nullifies any price advantage customers had as they will be charged with prices almost as similar to pre-GST regime.

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It was also pretty much the concern of Toyota as well. JLR stated that the cess hike would not only reflect on the sales but job creation and investment too while Audi India’s head, Rahil Ansari, was left disappointed with the sudden increase in GST rates. BMW insisted that it would influence on the stability and growth of the Indian auto industry. The hybrid and electric vehicles will continue with 43 percent and 12 percent GST rates respectively.

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Surendhar M
An ardent motoring and motorsport enthusiast with huge devotion towards writing. As a Mechanical Engineer by education and Assistant Editor of GaadiWaadi, I rant about anything that has appetite for speed. I idolize Ayrton Senna and as the great man once said I thrive to be competitive in whatever environment that I’m being put in and persevere to be the best at what I do with passion and commitment.