Wonder if cess is a tax or penalty: Audi India's Rahil Ansari

GST Council might hike the cess on large SUVs and luxury cars to 25%, from the current 15%

RAHIL ANSARI took charge as India head of German luxury car maker Audi in February when the industry was recovering from demonetisation and hoping to grow on a flat performance in 2016. The new goods and services tax (GST) brought down vehicle prices from July but it now seems the GST Council might hike the cess on large SUVs and luxury cars to 25 per cent, from the current 15 per cent, besides the GST of 28 per cent. Ansari tells Ajay Modi these uncertainties drive buyers away and impacts companies, dealers and the supply chain.

How do you react?
Yes, a second tax change discussion. I don't understand whether it's a penalty or a tax. We've just implemented the GST from July, a lot of work went into it and everyone looked forward to this uniform tax. Now, after five weeks of implementation, there is discussion on an increase. This is clearly against any liberal market dynamics that India has been offering so far.

Have you briefed your headquarters?
Obviously, everyone is concerned because as a global brand, we need consistency and planning security. India is regarded as a strategic market with huge growth potential. This proposal will definitely not be regarded in a positive manner. This forces us to re-evaluate our business plan.

You have worked in markets outside India, in Germany. How are things different outside?
In most other markets, you have more planning security. Changes, whether on tax or any other front, have a preparation phase. You know it's not going to be changed all of a sudden again. Changing again now after five weeks, independent of what it was...I cannot follow this. If you implement such a huge tax like GST and include cess, independent of segments (luxury or non-luxury), there should not be any miscalculation. Even if there was, you cannot simply change it because it's not toy money you can play with.

What plan did you have for the Indian market?
We have planned a product portfolio, a growth plan. We still have a couple of more products in the pipeline, not only for this year but for the years to come. We are even in the plan of talking about how to bring electrical mobility to India. Audi is going to launch three electric vehicles by 2020 globally. So, there is a positive spirit in terms of India as a growth market but what we need is consistency.

Do you think that if this is not reviewed, the market will shrink?
Earlier, we were planning double-digit growth for this year, I hope this will be sorted out soon in a positive manner, so that we can continue and achieve the targets we had.