If you are one who is infatuated with a foreign car, there are chances that you would be needing to pay more for it. The cars are getting more costly in the coming years. The 2018 budget is already out and according to the proposals, the locally assembled, as well as the fully imported cars both, would see an increase in taxation.
According to what Finance Minister Arun Jaitley had to say, the cars that are being locally assembled in India are likely to be increased in prices by about 3 to 5 percent. He had increased the customs duty on the motor vehicles brought to the country through the CKD or the completely knocked down route. The customs duty on the imported engine components could be raised from the 7.5 percent or 10 percent to 15 percent. There could also be a hike that would be imposed on the incoming engine components. This would surely impact the sale of carmakers like BMW, Jaguar, Audi, Land Rover and Mercedes-Benz. They have dedicated assembling units in India and are the ones who would be affected.
The cars that are brought to India in the fully imported form would also get pricier. The government would raise the taxes from 20 percent to 25 percent. This would surely drive the total import duty, which already stands at a steep rate of more than 180 percent. The rate hike proposal had been met with strong disapproval from the luxury carmakers.
The decision to impose the higher duty taxes is actually a move to promote the Make in India initiative of the government. There would also be a significant potential for the domestic value addition. This would be seen within the auto components sector as seen by the Finance Minister of the nation. The move would be affecting the entire auto industry of the country.