Prices of Luxury Car to go Down Just before GST Implementation

By Registrationwala

26th May 2017


Mid-Summers have become good for luxury car buyers since the largest luxury carmakers Mercedes-Benz and BMW have reduced their prices. Buyers can look forward to 4-6% mark downs or price reductions to the tune of Rs 1.5 lakh-Rs 7 lakh for models assembled in India. Government has planned to implement GST form July 1.

Jaguar Land Rover controlled by Tata Motors and Volkswagen-owned Audi may also follow suit with a similar reduction. Mercedes-Benz India has announced a downward revision in its transaction prices to cover the difference in current ex-showroom prices and post GST ex-showroom prices for customers. Locally assembled model range will decrease by 4% with immediate effect. Prices may lower down may vary from state to state between 2% and 9% as it will be "dependent on current tax structure and local body taxes compared to new GST structure. GLA, C-Class, E-Class, SClass, GLC, GLE, GLS and Mercedes-Maybach S 500. are the models which will gain  benefit in India. 

There has been comment from the Mercedes that “We are now passing on the benefits of post-GST pricing of our ‘Made in India’ cars with immediate effect. This to ensure complete peace of mind for our customers, as we have decided to pass on the GST tax benefits at an earlier stage at our cost. The following approach will benefit the customers to purchase a locally produced Mercedes-Benz from now on and during the month of June.

BMW being the Second biggest luxury car maker followed suit announcing an immediate reduction in its prices. Vikram Pawah, President of BMW Group India, said that the BMW group welcomes the implementation of Goods and Service Tax (GST) in India.  GST rush will offer reduced rate of interest at 7.9%. This will have complimentary service of 3 years and  complimentary one-year insurance and assured buyback for up to four years in addition to GST benefits.

Some Models of Jaguar like  Discovery Sport, which earlier cost Rs 47.88 lakh (ex-Delhi) is now down to Rs 43.80 lakh. Some other models are also expected to vary by 5 %. Officials said that the person spending 50 lakh will not be much bothered by the up and down. JLR assembles five models in India — the Jaguar XE, XF, XJ, Discovery Sport and the Range Rover Evoque. The Range Rover Evoque is down from Rs 49.10 lakh to Rs 45.85 lakh and the Jaguar XE from Rs 39.90 lakh to Rs 37.25 lakh. The just-launched XE diesel has also worked in the new price dynamics being launched at a lower price range beginning at Rs 38.25 lakh.

Brands like Toyota are unhappy about the rise in tax on hybrids given that the Lexus range for India are mostly hybrids. It is  that the  Fortuner range though the GST effect will lead to 5-6% price reduction when the tax structure is officially rolled out. Brands are also expecting that there will be growth in the momentum in the luxury car industry and will support the ease of doing business in India.

Automobiles have been set at the base GST rate of 28% under and it is on par with  the current rates for small cars and lesser than the rates slapped on bigger vehicle. Despite of all the different scenario luxury cars will still be cheaper under GST at 43 percent than the current rates ranging between 47-53 percent, depending on rates charged by states.


Prices of Luxury Car to go Down Just before GST Implementation