Home | News

India's luxury-car market, may hit a roadblock

India’s luxury-car market, may hit a roadblock if the government implements the decision to raise the cess on large vehicles. In such a scenario, sales could even fall in 2017, industry executives have said.

After a dismal performance in 2016, when the market shrank, luxury-car manufacturers had become upbeat when India set levies on the segment under goods and services tax at a lower rate compared with the previous regime.

They had immediately cut prices to pass on the benefit to consumers, who had responded positively, pushing up demand. But earlier this month, the GST Council decided to raise the cess charged on large cars and utility vehicles to 25% from 15%, taking the total tax incidence to 53% (28% GST plus 25% cess).