Make in India plan to be hit : 25% GST levy on large cars and SUV

New Delhi: GST rollout would dampen the spirits of the industry across the entire value chain. Toyota Kirloskar Motor, Mercedes-Benz, Audi, and BMW were unanimous that increase in cess on large, luxury cars and SUVs that had become cheaper. 


Luxury vehicle manufacturers hit out at the move to hike cess on large cars. It is said that the market dynamics would affect future plans of expansion under ' Make In India.'


The companies mentioned constant shift in policy makes long term planning highly risky. SUV's and luxury cars have the top tax rate that is 28 percent with additional 15 percent under the current GST.


Mercedes-Benz India MD and CEO Roland Folger said the company was highly disappointed with the move and it would be a strong deterrent to the growth of luxury cars in this country.


"As a leading luxury car maker, this will also affect our future plans of expansion under 'Make in India' initiative, which aims at making and selling world-class products in India, with the latest technology for end-consumers," he said in a statement.


The finance ministry on Monday said the GST Council has approved a proposal to hike cess on large cars and SUVs to 25 per cent from 15 per cent now. A decision on when to raise the actual cess leviable on the same will be taken by the GST Council in due course.


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