Well, it might prove to be a wise decision to hurry and buy an SUV or luxury car now because the taxman's noose could be tightening again on the segment. Under Goods and Services Tax(GST), luxury cars and SUVs evoke the highest tax rate of 28 percent with an additional cess of 15 percent thus taking the total to a whopping 43 percent.
However, the scenario is likely to change if emerging reports are to be believed. According to reports, the GST Council has given a nod to increase 15 percent cess levied on luxury and SUV models to 25 percent. Although this may not come into effect immediately because of the requirement for an amendment in the GST law, SUVs and luxury cars will cost more than the current cost if it is finally implemented.
For the record, the carmakers in India have thrown attractive prices that cut across their entire range post GST to pass on the benefits to customers. The new tax regime was rolled out in July.
Currently, cars with more than four-metre length and bigger engines stand to get a tax rate of 43 percent. With the proposed increase in the cess, the cars in this segment would attract 25 percent cess, taking the total to 53 percent from the current 43 percent.
With GST, the cars under four-metre and powered by petrol engines less than 1.2-litre capacity are taxed at 29 percent and the same also goes for cars under four-metre and powered by diesel engines less than 1.5-litre capacity.
