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M&M likely to be most impacted due to GST cess hike: Jefferies

The GST Council decided to hike the cess on mid and high-end cars on September 9

IANS  |  New Delhi 

The logo of Mahindra and Mahindra is seen at a showroom in Mumbai. (Photo: Reuters)
The logo of Mahindra and Mahindra is seen at a showroom in Mumbai. (Photo: Reuters)

Investment banking firm on Monday said that automobile major (M&M) which has a number of "larger UVs (utility vehicles)" in its portfolio, is likely to be impacted the most by the recent decision of the Council to hike the cess on luxury cars and SUVs.

"The Council hiked cesses on larger cars/SUVs by 2-7%. M&M, which has a number of larger SUVs in its portfolio, is likely to be the most impacted," the investment bank said in a statement.

"The government has again widened the gap in tax rates between smaller and larger PVs, which had narrowed post-GST, to the advantage of incumbents like Maruti. However, the move was widely anticipated and largely priced in - in fact the extent of increase was slightly lower than expected."

The Council decided to hike the cess on mid and high-end cars on September 9.

After the Council meeting in Hyderabad on September 9, Union Finance Minister said that while status quo has been maintained for small cars (petrol and diesel), hybrid cars and 13-seater vehicles, the Council decided to increase the cess rates for some segments.

Consequent to the Council's decision, the cess on mid-segment cars has been increased by 2%, for large segment cars it has been increased by 5% and for SUVs by 7%.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, September 11 2017. 18:55 IST
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