SUV Cess Raised From 15% To 25% | SUVs & Luxury Cars in India To Now Cost More

Wih SUV Cess raised from 15 per cent to 25 per cent, SUVs and Luxury cars will cost more in India. Raising a levy on luxury cars and sports utility vehicles has been approved by the government today. According to an official statement, the SUV Cess has been increased 10 per cent. From existing 15 percent the SUV Cess has been increased to 25 per cent.

SUV Cess Raised From 15 per cent To 25 per cent

The Cabinet approved raising a levy on luxury cars and sports utility vehicles. According to a report, the Cabinet has decided to increase the SUV Cess to 25 per cent from 15 per cent. It was reported that after the Goods and Services Tax (GST) roll out all cars attracted a basic GST of 28 per cent. This move reduced the prices of the luxury cars and SUVs which were passed on to the customers by several automakers.

SUV and Luxury car prices may go up

Earlier, luxury cars with more than 1,500 cc engine and SUVs more than 4 metres in length carrying an engine greater than 1,500 cc attracted an additional cess of 15 per cent. Today onwards, the luxury cars, as well as the SUVs, will attract a 10 per cent more cess which will make these four wheelers costlier.

According to reports, several car makers had reduced the prices of their cars after the GST roll out. Some of the automobile companies passed on the GST benefits to their clients that ranged between Rs 1 lakh- Rs 3.5 lakh since July 1. After government’s decision to increase the cess from 15 per cent to 25 per cent may lead to the revision in the price structure and it is expected that car makers may pull these benefits off.

Jaitley made the announcement

An ordinance was approved by the Union cabinet today for raising the GST (goods and services tax) cess on luxury cars and SUVs (sports utility vehicles). The cess was raised from 15 per cent to 25 per cent after the ordinance was approved. It was reported that the finance minister has said that the GST Council will decide on the timing of the cess hike. The new cess levy from 15 per cent to 25 per cent will be in addition to taxes on the sale of luxury vehicles.

Why has the cess been increased?

It has been reported that, cars attract the top tax rate of 28 per cent. In addition to this, a cess of 1-15 per cent is levied for the creation of the state compensation corpus. Since July 1, when GST was introduced, the total tax incidence on motor vehicles has come down as compared to the total tax incidence prior to the GST regime. This tax included GST plus compensation cess.

The GST Council that includes representatives of all states in India, on 5 August had recommended amendments which were required for increasing the cess. Increasing the cess was done by moving legislative by the Central government.

Source: NDTV


Munish Dhiman

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