Hyundai on Tuesday sought clarity from Government on definition of luxury cars and extra cess planned to be levied on large cars and SUVs.
Currently Hyundai’s models such as all new versions of its sedans Verna and Elantra are in the same same rate as luxury models from BMW, Mercedes and Audi. In the pre-GST system these models from Hyundai attracted lower tax rate than other luxury vehicles.
"We don't know what's going on. What is luxuryIJ "There is a need for more clarity from the GST Council regarding definition of various provisions such as engine size and vehicle length" said Hyundai Motor India ltd (HMIl) MD & CEO YK Koo.
Under the GST regime, large cars and SUVs with engine capacity greater than 1,500 cc with length more than 4 metres attract cess of 15 per cent in addition to the top tax rate of 28 per cent.
The GST Council has approved a proposal to hike cess on them from 15 per cent to 25 per cent. The decision on when to raise the actual cess leviable on the same will be taken by the council in due course.
On the government's move to hike cess on large cars and SUVs, he said: "We are little confused regarding extra cess that the Government is planning to levy."
When asked about possible impact if the cess were to be increased by 10 per cent, Koo said prices would go up but "at the moment we are not sure what would be the quantum of hike. We are waiting for some clarity on the issue".
The company on Tuesday launched all-new version of Verna in India with introductory price starting at Rs 7.99 lakh (ex-showroom Delhi) as it seeks to regain lost market share in mid-sized sedan segment. The fifth generation Verna will compete with the likes of Honda City and Maruti Suzuki Ciaz and Skoda Rapid
The petrol variants of the Verna are priced between Rs 7.99-12.23 lakh, while the diesel trims are tagged between Rs 9.19-12.61 lakh.