Finally, Government is imposing GST Cess hike on mid-sized, luxury and SUV cars from today. It has been nearly 72 days when government implement the biggest tax reform in the country.
This will raise car prices to pre-GST levels. The GST council voted for 10 per cent hike in GST cess and the cabinet approved it on Saturday.
Mid-sized sedans like Hyundai Verna, Honda City, Volkswagen Vento, Maruti Ciaz, Toyota Corolla will see 2 per cent cess hike which will take the GST rate to 45 per cent.
The luxury cars such as Mercedes-Benz sedans, Audi sedans, Jaguar XF will see cess hike by 5 per cent which will make total GST of 48 per cent.
BMW 3 series, BMW 5 series, BMW 7 series, Audi A3, Audi A4, Audi A6 and Audi A8 along with Mercedes C Class, E Class and S Class will now get more expensive by 5 per cent.
After the GST cess hike the auto companies are likely to hike the car prices to maintain the margins.
Under GST, large cars with engine greater than 1500cc and SUV with more than 4 metres length and engine greater than 1500 cc are effective for 15 per cent cess.
SUVs will see a cess hike of 7 percent which will take the tax to 50 per cent. SUVs like Mahindra and Mahindra Scorpio and XUV500, Renault Duster, Toyota Fortuner, Ford Endeavour to luxury ones like Land Rover Discovery, Audi Q3, Q5 and Q7, BMW X3 and X5, Mercedes GLA, GLC and GLS will all see prices going up by 7 per cent.
As per auto companies, the frequent changes in rates could take the market to instability and affect demand growth.
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