Mercedes-Benz India on the GST cess

 Statement by Mr. Roland Folger, MD & CEO, Mercedes−Benz India on the recent GST Council’s decision on cess hike of large cars and SUVs.

“The decision to increase the Cess yet again is very unfortunate and totally overlooks  the contribution we make to the industry and to the economy. Though luxury car industry’s volume contribution is very low, our value wise contribution is much higher and that has immense potential to grow even more in the future, had there been fair taxation. However, by continuous taxation of the segment, the overall revenue generation is going to be hurt, as the increase in price is going to hurt demand. It seems the contribution of luxury car industry to the total PV market in India will remain constricted, though in the other developed economies, it is on a higher side and continues to rise gradually. With this increase in Cess now, the prices are bound to leap back to the pre-GST regime, in some cases higher than the pre-GST regime, thus negating altogether the benefits of GST regime. ”