GST brings ‘achhe din’ for luxury car buyers: BMW, Mercedes, Audi become cheaper, autos, Hindustan Times

GST brings ‘achhe din’ for luxury car buyers: BMW, Mercedes, Audi become cheaper

Hindustan Times, Fresh Delhi

Luxury cars are expected to become cheaper by 4-8% once the goods and service tax (GST) structure kicks in on July 1. Expecting slow sales in June, anxious luxury carmakers such as Mercedes-Benz and BMW are right away passing on the effective benefit of the fresh tax structure to the customers .

Under the fresh tax regime, luxury vehicles will attract a 28% GST, besides a maximum cess of 15%, so the maximum duty one would end up paying is 43%. At present, the effective tax on ex-showroom prices of luxury vehicles is around 52-55%.

Leading the pack bracing for GST influence, BMW India announced passing on the benefit of GST to its customers May twenty onwards, besides also suggesting extra benefits to effectively drop its car prices by up to 12%.

“The combination of extra benefits from BMW India that can be availed along with GST benefits on select models are: diminished rate of interest of 7.90%, complimentary service and maintenance for three years, complimentary insurance for one year and assured buyback up to four years,” BMW India said in a statement.

The effective price drop would be up to 12%, depending on the model and the place of purchase, the company said, adding that the suggest will be valid for limited period or until stock lasts.

BMW India produces luxury hatchback one Series; luxury sedans of three Series, five Series and seven Series; the BMW three Series Gran Turismo; and the SUVs X1, X3 and X5 at its Chennai plant. Besides, it imports downright built-up units of the six Series Gran Coupe, M6 Gran Coupe and M4 Coupe, the SUVs X6, X5 M and X6 M; sports sedans M3 and M5 and the Z4 roadster. The Munich-based carmaker also imports the BMW i8, its flagship electrical car as CBU in India, which comes at Rs Two.14 crore (ex-showroom Delhi).

Volkswagen AG’s premium brand Audi India also on Friday diminished ex-showroom prices of its entire car range to offset the influence of GST launch on its May and June sales.

The price drop ranges from Rs 1.Five lakh on its entry-level models to Rs ten lakh on top-end models, and will be effective instantly till June end, a dealership source told HT.

Audi India sells a range of premium vehicles — luxury SUVs Q3, Q5 and Q7; sedans A3, A4, A6 and A8; and sports cars Audi TT, Audi RS6, Audi RS7, Audi RS8 — priced inbetween Rs 30.Five lakh and Rs 1.15 crore.

“As opposed to the market trend, this is not a measure to clear old stock; we are extending the benefits on our fresh cars as well,” Audi India head Rahil Ansari said in a statement.

Mercedes Benz India too on Thursday announced passing the GST benefit to the customers, which is an average 4% across its ‘made-in-India’ range. The difference in the pre- and post-GST enforcement prices for the customer is Rs 1.Four lakh to seven lakh.

Mercedes Benz produces nine models in India priced inbetween Rs thirty two lakh and Rs 1.87 crore (ex-showroom Delhi). These include CLA sedan, SUVs GLA, GLC, GLE and GLS, and C-Class, luxury sedans E- Class, S -Class and Maybach S500.

While the exact influence of the GST will be seen in months to go after, other luxury carmakers may also look to encash the chance, some to clear stocks quicker while others to offset the expected haul in sales.

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