The new Goods and Services Tax regime had seen a realignment of taxation in the passenger car space to 28 per cent GST. However different segments of vehicles also attracted an additional cess - 1 per cent for small petrol cars / 3 per cent for small diesel cars (under 4 metres in length and certain engine capacity), and 15 per cent for larger cars and SUVs.
Only pure electric cars attract a 12 per cent GST rate and no cess. That cess of 15 per cent for the larger cars is now set to go up by an additional 10 per cent.
Manufacturers have all protested the move, calling the change in policy so soon after GST roll out damaging. Most manufacturers had called for an outright rethink, and if an increase was to happen then at least a change in the definition of what qualifies as a luxury car.
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