While calculating the budget of 2018, there were more expectations particularly in the industry of automotive. The luxury car makers in the industry are expected to reduce the GST rates and the electric car makers expected a push whereas the government is taking some steps to convert into electric in the future. But all the expectations were not satisfied. The government also announced that there will further increase in rates of parts that are imported. This also provides a chance to use products that are available in the local market and it will allow the carmakers to make use of the products that are made in India.
Hike In Custom Duty:
Arun Jaitley who is the Finance Minister has proposed a rise in the luxury cars which are made by purchasing the parts from the outside of the country and not made by using the parts manufactured in the country. The cost of the vehicles that includes the kits purchased from outside and made to be assembled in India. This is applicable to both the cars as well as the motorcycles that are made from kits that are imported to India.
The customs duty for these luxury vehicles has been increased from 10% to 15%. Also, this is because most of the luxury cars are not making use of parts that are manufactured in India and they only used to assemble in India. Most of the luxury automakers like Mercedes-Benz, Audi, Jaguar Land Rover, Triumph, BMW, Volvo, and Harley-Davidson are having their assembly plants in the country and they only used to assemble here. There are also many other cars looking to enter the Indian market. But due to the hike in custom duty, it is little difficult to see them in the Indian industry.
The rate of the cars that are used to assemble in India will have a revision price of Rs.80,000 for cars which costs around Rs.25 lakh. The customs duty for other vehicles like fully imported, bikes as well as SUV’s remain untouched. Because of this, the automakers are affected in a great manner and there will be a hike in the price of the cars which uses more imported kits. By hearing this, the automaker industries have felt disappointment.
Rahil Ansari About Custom Duty Hike:
The head of Audi, Rahil Ansari said that for the sector of the luxury carmaker, the budget is very much disappointing. The manufacturing company itself has some social responsibilities towards their dealer as well as their workforce. This hike in the custom duty will definitely increase the prices of the car and brings a lot of confusions to the customers. He also added that the price of the car has become stable now after the problem of GST and this decision will definitely reduce the attraction towards the luxury cars.
He also stated that the luxury car manufacturers are making an investment in several ways to provide best dream car to the customers and to make it more realistic to the customers. They are also expecting the government to support them in their industry.