11th September 2017: New Delhi (Monday) Society of Indian Automobile Manufacturers (SIAM) has expressed relief that a GST Cess of 25% has not been imposed across the board on all larger cars as was the apprehension. With the new GST Cess, the taxation on mid-sized passenger cars have been almost restored to the pre-GST levels, while taxes on luxury cars and SUVs have been slightly moderated as compared to the pre-GST rates. Also, now there are a few more slabs of taxes on the auto industry as compared to the erstwhile Excise Duty structure.
Government has also recognised the need to encourage hybrid vehicles by creating a differential taxation on hybrid cars, which was one of SIAM’s request and this is a welcome step.
However, SIAM feels that the long standing anomaly in the taxation of 10-13 seater vehicles could have been fully corrected and these should have been fixed at a GST rate of 28% without any cess as these are public transport vehicles and not for personal use. SIAM hopes that this anomaly would be addressed in future.
SIAM hopes that these new cess rates will now remain stable and not be increased frequently.
SIAM also hopes that now the states would not unilaterally increase the Road Taxes as now they would be receiving increased compensation through the revised cess.