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GST to make luxury and premium car models cheaper

LiveMint logoLiveMint 01-07-2017 Shally Seth Mohile

Mumbai: Buyers of luxury and premium car models stand to benefit the most in the new goods and services tax (GST) regime. Most of the manufacturers of such models on Saturday said they are passing on the GST benefits with effect from Saturday.

The price change will depend on each state, model and variant, depending on tax rates applicable prior to GST. The move may spur sales of luxury car models in a market where their overall share in the passenger vehicle market is less than 2%.

The local unit of the British carmaker Jaguar Land Rover Automotive Plc has slashed prices of its locally assembled models in the range of Rs2.61 lakh to Rs5.07 lakh. JLR assembles the Jaguar XE, XF, XJ, Discovery Sport and Range Rover Evoque models in India. Audi India Pvt. Ltd too has cut prices in the range of Rs45,000 to Rs3.11 lakh on its locally assembled models. Audi assembles the A3, A4, A6, Q3 and Q7 in India.

BMW India and Mercedes India too have passed on the benefits.

Toyota Kirloskar Motor Pvt. Ltd on Saturday said it has also pared prices of models across the range. While the approximate price decrease in Bangalore for Innova Crysta will be up to Rs98,500, the price cut on Fortuner is up to Rs2.17 lakh. Prices of Corolla Altis also are lesser by up to Rs92,500.

Also read: GST speculation affected sales of major auto firms in June

The company however has hiked prices of hybrid variants Toyota Camry and Toyota Prius with the strong hybrid technology by over Rs3.5 lakh in Bengaluru and going up to Rs5.24 lakh in Delhi as per applicable tax under GST framework.

Till 30 June, a buyer of a luxury car or any other big car which includes a sport utility vehicle (SUV) were paying a total duty of up to 55% of factory gate price (including 27% or 30% excise duty, a 12.5-15% value added tax (VAT) on base price plus excise and other cesses, 1% national calamity contingency duty, 1.8% auto cess, 1-4% infrastructure cess and another 4% Octroi/local tax in states such as Maharashtra). With the maximum cess on luxury cars capped at 15%, and with a GST rate of 28%, the maximum duty one will pay is 43%. All the other cesses and local duties get subsumed with the GST.

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