Diwali 2016 has not been a very exciting time for luxury car manufacturer or dealer in India with uncertainty over Goods and Services Tax (GST) Rate.
GST in India is expected to see four tier rate structure. Currently, luxury cars’ attract combined effective tax of 52%. With news of luxury cars being taxed at 26% and nominal cess, the prospective buyer see a huge cost reduction opportunity.
People are delaying their buying decision until they have clarity on the levies, said industry insiders.
In the first nine months of 2016, the luxury car market is estimated to have expanded 3-5% to about 26,000-28,000 units, largely driven by double-digit growth at BMW, Jaguar Land Rover and Volvo which were aided by new launches. The top two, Mercedes-Benz and Audi, have posted flattish to low single-digit growth.