In hindsight it was too good to be true and now GST, which made luxury cars and SUVs cheaper, is all set to roll back and increase cess from 15 percent to 25 percent. This has been done to bring back the rates closer to what they were before GST was implemented. Currently with GST, rates for midsize, hybrids, sport utility vehicles and luxury cars is 43 percent and with increase it would be 53 percent- nearly the same as it was before GST.
A reduction on the rate for hybrids was rejected recently and the actual timing when it would be added and applied is still unclear. This is not good news for car-makers and it will hurt demand and also will mean increase in prices. It would also bring instability in operations and plans. Mercedes-Benz has reacted saying they are highly disappointed with the decision and it will no doubt affect their future plans. Mercedes also said that this decision once again reiterates the need for a long-term roadmap for the luxury car industry, which has been at the receiving end of arbitrary policies. Thus it means the party is over and if you were planning to buy a luxury car or SUV, we say do it fast!