Honda India believes hike in cess to impact growth of advanced global models

Honda India believes hike in cess to impact growth of advanced global models New Honda
author image Nikhil Puthran
Tuesday 15 August 2017, 10:30 AM

Honda Cars India Ltd (HCIL) President and CEO Yoichiro Ueno has said that the move to hike the ceiling of cess on large cars and SUVs to 25 per cent under the new GST regime would impact growth of advanced global models in India and could pose an impediment to the country becoming a global hub for automobile production. Overall, the Implementation of GST from 1 July has seen a considerable effect on the auto industry in India.

Although the company has welcomed the governments tax reform achieved through GST implementation, Yoichiro Ueno said, “The latest government move to increase the ceiling on the additional cess on automobiles from 15 per cent to 25 per cent on larger cars and SUVs, is a big disappointment.” He believes that the move will create a bias towards small cars.

Currently, large cars and SUVs attract top GST rate of 28 per cent with a cess of 15 per cent. However, earlier this month, the GST Council approved a proposal to hike cess on these cars to 25 per cent. “If vehicles produced in India are very different from global trend, it will also impact the development of the Indian automobile industry,” added Uno. “It makes export of both CBU vehicles and auto components more difficult and poses hurdles for India in the way of becoming global hub for automobile production.”

Additional details on the cess hike and its implications will be known over the next few days.

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