The GST council has hiked the additional cess levied over the base 28% tax on mid-size sedans, luxury cars and SUVs, effective from today. “Notification regarding increase in the effective rates of Compensation Cess on specified motor vehicles will be issued on 11.09.2017 effective from 00 hours the same day”, tweeted the Central Board of Excise & Customs.
Mid-size sedans like Hyundai Verna, Hyundai Elantra, Maruti Ciaz, Honda City, VW Vento will see a hike of 2%. SUVs/MPVs like Ertiga, Scorpio, XUV 500, Jeep Compass, Hexa, Crysta, Fortuner will be expensive by 7%. The luxury segment like Mercedes, Audi, BMW, Jaguar has been slapped a 5% hike. With this, the council seems to have dropped the flat 10% hike that was planned earlier.
The final tax numbers on mid-size sedans will be 28%+17% = 45% or 28%+20% = 48% (depending on the engine), and luxury segment/SUVs will attract 28%+22% = 50%.
The taxes on small cars and electric cars will remain unchanged. However, the disappointing part is that the taxes on Hybrids too remain unchanged despite several requests from automakers. That means hybrids will still attract a 43% tax (28%+15%).
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