Indian government approves raising the maximum levy on SUVs and luxury cars

The cabinet on Wednesday approved raising the maximum levy on large cars, luxury cars and sports utility vehicles (SUVs).

Reuters August 30, 2017 22:02:03 IST
Indian government approves raising the maximum levy on SUVs and luxury cars

The cabinet on Wednesday approved raising the maximum levy on large cars, luxury cars and sports utility vehicles (SUVs), Finance Minister Arun Jaitley said, adding that a panel of central and state finance chiefs will decide on the timing of the increase.

Indian government approves raising the maximum levy on SUVs and luxury cars

Lamborghini car

The levy is part of a nationwide goods and services tax (GST) launched last month to replace a multitude of provincial and national levies in the biggest tax reform in 70 years.

Under the new sales tax, vehicles are mainly taxed at 18 percent or 28 percent with an additional levy of 15 percent on some types of cars.

The cabinet passed an executive order, or ordinance, to raise the maximum levy to 25 percent from 15 percent, which could make large luxury cars and SUVs more expensive.

“The ordinance is only an enabling law. This does not mean the cess will automatically increase,” Jaitley said.

He said the GST council, comprising federal and state chiefs, will be “entitled” to take a decision on whether to increase the cess within the permissible limit of 25 percent.

Any increase in taxes will impact luxury carmakers in India such as Daimler AG’s Mercedes-Benz, BMW, Audi, Volvo and Jaguar Land Rover, owned by Tata Motors, as well as automakers such as Toyota Motor, Mahindra & Mahindra and Maruti Suzuki that sell SUVs.

Updated Date:

also read

Junior finance minister says higher Q1 tax mop-up shows economy on recovery path
Business

Junior finance minister says higher Q1 tax mop-up shows economy on recovery path

Net direct tax collection in the April-June quarter of the current fiscal is over Rs 2.46 lakh crore, as against more than Rs 1.17 lakh crore during the same period of the previous fiscal

Audi e-tron and e-tron Sportback launched in India, priced lower than Mercedes-Benz EQC
News & Analysis

Audi e-tron and e-tron Sportback launched in India, priced lower than Mercedes-Benz EQC

The Audi e-tron is available in two variants, while the Audi e-tron Sportback is available in a single variant.

Audi India reveals details of service packages, buyback offer for Audi e-tron electric SUV
News & Analysis

Audi India reveals details of service packages, buyback offer for Audi e-tron electric SUV

Along with an eight-year warranty for the battery, Audi e-tron buyers will also be eligible for a buyback offer.