Skip to main content

Car prices to go up on GST cess hike

Car prices to go up on GST cess hike
Hyundai India, the country's second-largest carmaker, said vehicle prices will go up substantially as the government hikes tax on auto mobile manu facturers as part of a revi sion of GST ra tes. Y K Koo, MD and CEO of the company's local operations, said Hyundai will have to pass on the increased cost as the government moves to hike cess on larger vehicles to 25% from existing 15% (levied over 28% GST rate).Koo said that the measure is surprising and shocking as it is being proposed in just second month of the GST regime. “We are little confused...and really do not know what exactly is going on.“ Companies say they are not aware of what the government means when it says the cess on `luxury vehicles' will be revised. “We are wondering as to what is the definition of luxury , is it meant for any particular engine size, or will it be based on length of the vehicle. Also, what is the percentage of hike that will be mandated for our types of vehicles?“ Koo said. The auto industry has expressed disappointment at the government's decision to revise the duty as it comes too early in the GST regime which was implemented from July this year. The GST Council has cleared the measure and now it awaits a legislative approval. Once approved, the move can see prices of Hyundai's cars such as Verna and Elantra sedans and SUVs like Creta and Tucson go up -from Rs 50,000 to over a lakh (in case entire 10% is passed on).

Other cars that could be impacted due to the measure may include Maruti's Ciaz, Honda's City and Jeep's Compass.Almost all the luxury models from companies such as Mercedes Benz, Audi, BMW and Jaguar Land Rover will see price increase. “We are disappointed and I am also irritated,“ Rahil Ansari, head of Audi in India said as he forecast a 20-30% fall in luxury car sales due to the decision.

The Times of India, New Delhi, 23rd August 2017


Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…