BMW, a popular premium car manufacturer in the country, has stated that the Indian Government’s proposal to hike cess on SUV and large cars will lead to slow down of the premium car market. The GST Council recently approved a proposal to hike cess to 25 per cent, from the existing 15 per cent under GST since 1 July for SUVs, large and luxury cars. BMW has said that the Indian government should take a ‘pragmatic decision’ on its proposal.
Speaking to the media, Vikram Pawah, president, BMW India, said, “It has not happened as yet. They are discussing. So very difficult to say what it is at the moment. We just heard that they want to look at it. When they want to do it and how it will happen it is not clear. If the cess or anything is increased, supposedly, then that might slow down the growth of this market and then there will be a revenue loss for the government. We are really hoping that the government will look at it.”
Under GST, cars currently attract the top tax rate of 28 per cent and a cess of 1-15 per cent (depending on the vehicle) is levied to create a corpus to compensate states for loss of revenue from GST implementation. If this 15 per cent cess on SUVs, large and luxury cars is hiked to 25 per cent, their prices are expected to see a considerable rise.
