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GST cess hike impact: Luxury cars, SUVs become more expensive

Prices for Innova MPV increased by Rs 78,000 while Fortuner SUV witnessed a price surge of Rs 1,60,000

Shubham Parashar  |  Mumbai 

Toyota Innova Touring Sport. Photo: Official website
Toyota Innova Touring Sport. Photo: Official website

Post roll-out, the council had charged auto industry a tax of 43% (28% + 15% cess). On September 9, the Council had raised the cess by 2%, 5% and 7% across three different segments taking the taxes to as high as 50%. 

Cess on mid-segment that exceed four meters in length with an engine capacity of above 1200 cc in petrol or above 1500 cc in diesel has been increased by 2 per cent. These will attract 45 per cent (28 per cent + 17 per cent cess) as compared to 43 per cent before (28 per cent + 15 per cent cess). Taxes on luxury have increased by 5 per cent charging them at 48 per cent (28 per cent + 20 per cent cess) under regime. However, the Council has been most harsh on UV makers by charging SUVs at 50 per cent (28 per cent + 22 per cent cess). The cess on SUVs has surged by 7 per cent.

Following the increase in cess, car companies have started to revise prices. On Wednesday, announced new prices for four of its models. Prices for Innova MPV increased by Rs 78,000 while Fortuner witnessed a price surge of Rs 1,60,000. In the mid-segment category, Toyota’s worldwide popular model Corolla Altis saw a price hike of Rs 78,000 and the price of company’s entry level sedan Etios increased by Rs 13,000.

On the same day, over a query made by Business Standard, domestic UV major Mahindra & Mahindra also shared the updated prices of two of its prominent SUVs, Scorpio and XUV 500. The prices of Scorpio went up by Rs 34,401 for the base S2 variant from Rs 9,35,934 to Rs 9,70,335 post. The prices of Scorpio’s top variant S10 has gone up from Rs 13,40,122 to Rs 13,89,337 witnessing a surge of Rs 49,214. The company’s flagship SUV, XUV 500 has become expensive by Rs 44,735 for base W4 variant and Rs 66,207 for top of the line W10 Automatic variant. The prices of W4 variant has increased from Rs 12,12,948 to Rs 12,57,683. W 10 variant has seen a price increase from Rs 18,05,904 to Rs 18,72,111.

Isuzu Motors have also revised their prices. The prices for MU-X has been revised to Rs 23,53,318 while the 4x4 variant is priced at Rs 25,49,022. 

However, the are still cheaper compared to pre-rates. When kicked in, had made Innova cheaper by Rs 1 lakh while Fortuner underwent a price lakh of Rs 2 lakh. Corolla Altis too saw a price cut of Rs 98,000 while prices of Etios were scaled down by Rs 24,500.

However, some carmakers passed on benefits to the customers, for example prices of Mahindra SUVs were also reduced by 6.9 per cent on an average. The prices of Scorpio S10 variant fell down from Rs 17.64 lakh to Rs 14.58 lakh while XUV 500 underwent a price cut of Rs 3.48 lakh post- The price of W10 AWD Automatic variant was reduced from Rs 22.20 to Rs 18.72 lakh.

First Published: Wed, September 13 2017. 21:11 IST