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Government imposed Taxes on Luxury cars

By Motortrend India Staff   |   17 June,2008

An additional tax of Rs 15,000 to Rs 20,000 has been smacked by the government on luxury cars, SUVs (Sport Utility Vehicle) and MUVs (Multi Utility Vehicle), which is above the regular excise duty of 24%.

This new duty structure would restrict car owners to use fuel-gulping vehicles. Basically the hike has been made to dampen private car buyers from buying big cars.

The government has raised the excise duty on cars having an engine capacity ranging from 1,500cc to 1,999cc by Rs 15,000 per vehicle and vehicles having engine capacity of 2,000cc would be costlier by Rs 20,000.

The price of luxury car brands like Audi, Daimler Chrysler, BMW, Mercedes and Skoda would go up by Rs 20,000. The sale of SUVs like Tata Safari, Tata Sumo, Mahindra Scorpio, Bolero, Toyota Innova is also likely to get a downfall.

However, the new duty structure will not affect the prices of small cars like Maruti 800, Alto, WagonR, Hyundai Santro, i10 and Tata Indica.

The car having an engine capacity of up to 15,000cc does not come under the new duty structure. Thus around three-fourth of the cars available in India like Maruti 800, Alto, WagonR, Swift, Chevrolet Spark, Hyundai Santro, Getz, i10, Accent, Honda city, Tata Indica, Indigo and Fiat Palio will not face the new tax scheme.

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