Luxury car game will not be so strong if GST with higher cess gets implemented!

Image Source - http://gtspirit.com

It’s no new news that India has proved to be a robust market for British luxury cars. Lately the industry has witnessed the further hike in exports or luxury cars from UK to India.

But now the cess on sports utility vehicles and luxury cars is likely to be increased to 25 % from the current 15 %, making these vehicles more expensive. The Goods and Services Tax (GST) Council has taken a decision to this effect but has not discussed this yet. The increase in the cess will take the effective tax rate on these cars to 53 %.

The Indian Automotive sector which has been one of the prime contributors to the GDP, was looking forward to welcome all new Automobiles in the Indian Automotive Market, manufactures were hoping to face the double demand for their product, thereby boosting the GDP as well. But if the higher cess on current GST regime gets approved by the government, the India’s luxury-car market, which was bracing for double-digit growth, may hit a roadblock. In such a scenario, sales could fall for second consecutive year in 2017.

The reason for this, according to the GST Council’s Fitment Committee, was that the post-GST tax incidence on motor vehicles across most categories was significantly lower than the pre-GST tax.

After a dismal performance in 2016, when the market shrank, luxury-car manufacturers had become upbeat when India set levies on the segment under goods and services tax at a lower rate compared with the previous regime.

They had immediately cut prices to pass on the benefit to consumers, who had responded positively, pushing up demand. But earlier this month, the GST Council decided to raise the cess changed on large cars and utility vehicles to 25% from 15%, taking the total tax incidence to 53% (28% GST plus 25% cess).

If this government’s decision gets implemented, luxury car manufacturers will have to increase the price which will affect the demand in India for these cars leading to a double-digit drop in sales, affected future investments and job losses.

Shriram Automall India Limited(SAMIL), No.1 trusted service provider of used vehicles & equipment in India, has made it their job to be sure to fulfill all the used vehicle demands of the Indian Automotive market. In their huge Automalls, you can find used vehicles & equipment of every make and brand.

So, if you are looking forward to exhibit your style with your own used luxury car, SAMIL is a way to go. You can both visit your nearby Automall and go through their inventory in person, or download “My SAMIL APP” and in just one click can go through their huge range with your Android Mobile Phone. You can also click the link below and simply register yourself. 

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