25% GST cess on large cars, SUVs: Auto cos' Make in India plans to be hit

Auto cos also said a constant shift in policy makes long-term planning for the market highly risky

LATEST NEWS : Luxury vehicle manufacturers on Monday hit out at the move to hike cess on large cars and SUVs to 25 per cent, saying it was against the spirit of liberal market dynamics and would affect future plans of expansion under 'Make in India' initiative.

Toyota Kirloskar Motor, Mercedes-Benz, Audi, and BMW were unanimous that increase in cess on large, luxury cars and SUVs that had become cheaper after GST rollout would dampen the spirits of the industry across the entire value chain.

The companies also said a constant shift in policy makes long-term planning for the market highly risky, and it would only have an adverse impact on India's financial ratings.

Under the current GST rates, SUVs, large and luxury cars attract the top tax rate of 28 per cent with an additional 15 per cent cess.

"The message that we are getting from the government from such a move is that it is not looking at the auto sector to spur economic growth," Toyota Kirloskar Motor Vice Chairman and Whole Time Director Shekar Viswanathan told PTI.

He further said increasing cess on large cars and SUVs will "selectively benefit some companies while putting others at a disadvantage".

Mercedes-Benz India MD and CEO Roland Folger said the company was highly disappointed with the move and it would be a strong deterrent to the growth of luxury cars in this country.

Also read this : Sebi bans trade in suspected shell companies. Here is the full list