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‘High Taxes Hindering Growth of Luxe Cars’

A high taxation regime is restricting growth of the luxury car segment in India and the government should look at lowering the levies in order to help the sector grow, according to German automaker Audi.

Luxury car volume account for less than 2% of the overall passenger vehicle sales annually and the sector has been more or less at the same level for the past decade.

“While the volume segments have been growing all these years, the luxury segment went up to 40,000 units a year and stayed in that range and this year we can end up even lower than that,” Audi India head Balbir Singh Dhillon said.

Hefty taxes have ensured that the segment has remained in the slow lane over the years.

“The luxury segment has remained less than 2% of the overall passenger vehicle vertical. I think the major request we have for the government is to reduce the duties. Apart from 28% GST, which in any case is high, we also have cess on top of it,” Dhillon stated.

Besides, there is high registration cost in some of the states and the rising fuel price also adds to the total cost of ownership, he added.

“So if this cess part is taken off and also if the registration costs are kept reasonable and same across the country, it will help the segment,” he noted.

“Our request is to standardize the taxation structure because our customers are very well travelled and they know that the same models which we are selling here at higher cost are much more affordable in other countries. We are one of the countries where the taxation is the highest,” Dhillon noted.

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