Hike in GST cess on larger passenger vehicles could derail demand momentum: ICRA
While the passenger vehicle market is expected to grow by a healthy 9-10% in India during FY18, the increase in the cess by the GST Council poses a challenge to this growth.
Key highlights:
- Impending increase in cess from 15% to 25% on larger vehicles poses challenge, says ICRA
- Passenger vehicle industry will grow by a healthy 9-10% during FY18
- The price cut post GST had aided the growth in the passenger vehicle segment
The passenger vehicle industry will grow by a healthy 9-10% during FY18 and between 9-11% at a Compounded Annual Growth Rate (CAGR) over the next five fiscals.
However, the GST Council's decision to increase in the cess on passenger vehicles over 4 metres to 25% from 15% poses a challenge and could derail demand momentum in the interim, according to a recent ICRA report.
“Impending increase in cess from 15% to 25% on larger vehicles poses challenge and could derail demand momentum in the interim,” said the report.
SUVs, luxury cars to get expensive as GST Council recommends hike in cess to 25%
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