- The maximum reduction is in Maharashtra where cars were attracting 20 per cent road tax along with 4.5 per cent Octroi before GST
- Over Rs: 1 Crore can be saved in tax on a car with ex-showroom price over Rs 5 crore in Maharashtra
- Insurance rates increased by mere three percent
Goods and Service Tax (GST) has brought rejoice for the car buyers in India. While the conventional customers are enjoying significant price cut on various models, those who are willing to buy a supercar or an ultra-luxury car will feel a pre-season festivity, especially in Mumbai.
The Maharashtra state government has raised the one-time registration tax on private two- and four-wheelers by 2 percent to offset the loss of revenue, following the repeal of octroi and local tax post-GST.
However, the central government has capped the tax amount on the high-end CBUs at just Rs 20 lakh. With effect to this change, some of the cars costing over Rs 5 crore will get cheaper by over Rs 1 crore.
For example, the Lamborghini Aventador Roadster LP 700-4 comes with an ex-showroom price tag of around Rs 5.64 crore. In the previous tax system, the car was attracting 20 per cent (Rs 1.13 crore) road tax along with 4.5 per cent (Rs 25.38 lakh) Octroi in Maharashtra, making the overall cost over Rs 7.2 crore.
With the new tax system in effect, you have to pay just Rs 20 lakh against the sum or both these taxes, saving more than Rs 1.18 crore. Now, that much is enough to buy another mid-sized luxury car, such as the Jaguar XJ or a top-spec Mercedes-Benz E-class.
Now, this was just one example, if the same tax structure is applied on the Buggati Veyron (ex-showroom price around Rs 12 crore)? The reduction in the on-road price will be around Rs 2.74 crore.
Another variation in the on-road costing will be contributed by the three per cent hike in the insurance cost. Let’s assume, Rs 10 lakh insurance for a Lamborghini will now cost Rs 10.3 lakh. So, is it going to affect the overall pricing of these high-end supercars and ultra-luxury cars?
Source: Times of India