Luxury cars, SUVs to get costlier as Cabinet approves ordinance to hike cess

Agencies
August 30, 2017

New Delhi, Aug 30: Almost all cars except small hatchbacks will soon cost more in India as the Union government cleared on Wednesday an ordinance to hike the cess on vehicles from 15 to 25%.

The hike will apply to mid-size cars, premium hatchbacks, SUVs and luxury cars, which became cheaper under the new Goods and Services Tax system that was implemented on July 1.

Cess is an additional levy on cars that fall in the GST’s top tax bracket of 28%. The cess earlier ranged from 1-15%, with cheaper and less polluting cars such as small hatchbacks with frugal petrol engines attracting lower levy.

The date for implementing the hike in the upper limit of the cess from 15% to 25% will be decided by the GST Council when it meets in Hyderabad on September 9, sources said.

The upper limit rate is applied to cars such as Toyota Fortuner (an SUV), sedans from BMW, Audi and Mercedes, and mid-size sedans such as the Honda City.

Cars smaller than 4 metres attract 1% cess if they have a petrol engine with a capacity of up to 1,200cc; or 3% if they run on a diesel engine smaller than 1,500cc. The cess on these vehicles will remain unchanged.

And despite the hike in cess, mid-segment cars, large cars and SUVs will still be cheaper than what they cost before GST kicked in.

The total tax rate on these cars before GST was in the bracket of 52-54.72% to which 2.5% was added on account of central sales tax, octroi etc.

Against this, after GST, the total tax incidence came down to 43%.

Consequently, prices of SUVs, for instance, fell by Rs 1-3 lakh after GST was rolled out and some luxury cars saw as much as Rs 10 lakh shaved off their tags after GST rolled out.

It was this decrease that led the GST Council to decide on August 5 that the cess needs to be hiked.

The money collected from this cess is used by the central government to compensate states for any revenue loss under GST.

For raising the cess, the government will eventually need to amend the GST (Compensation to a State) Act, 2017. For now, it will do this through an ordinance, which will need to be cleared by the President.

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News Network
November 27,2025

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Bengaluru: The Vokkaligara Sangha on Thursday issued a stern warning to the Congress, saying the party could face serious electoral repercussions if Deputy Chief Minister D.K. Shivakumar is not appointed as Chief Minister.

The warning follows the public backing of Shivakumar’s chief ministerial ambition by top Vokkaliga pontiff Nirmalanandanatha Swami, who urged the Congress high command to honor his claim.

“The community supported Congress in the 2023 Assembly elections only because Shivakumar had a real chance to become CM. If he is cheated, we’ll teach the party a big lesson,” said newly elected Sangha president L. Srinivas. He added that Vokkaligas would organize protests under the guidance of community leaders.

General Secretary C.G. Gangadhar pointed out that Congress won more seats in the Vokkaliga-dominated Old Mysuru region due to Shivakumar’s influence, adding, “If Congress wants to retain power, Shivakumar should be made the CM.”

Outgoing president Kenchappa Gowda emphasized Shivakumar’s contribution to Congress’ victory. “Our community voted for Congress thinking he would become CM. Siddaramaiah has also served the party well, but Shivakumar should now be given a chance,” he said.

Former general-secretary Konappa Reddy appealed to Sonia and Rahul Gandhi to recognize Shivakumar’s loyalty and service, saying, “Congress is known to keep its promises. We hope it won’t break the promise made to him.”

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News Network
November 30,2025

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Mangaluru, Nov 30: A 22-year-old college student succumbed to her injuries at a private hospital in Mangaluru today, days after she was hit by a goods tempo while crossing a road in Padubidri.

The deceased has been identified as Preksha, a resident of Nadsalu Billitota in Padubidri. The fatal incident occurred as Preksha, who was returning home after completing her examination, attempted to cross the service road towards Mangaluru. She was struck by a goods tempo approaching from the Udupi side, causing her to fall and sustain a severe head injury.

Prompt action from local residents ensured she received immediate first aid before being rushed to a hospital in Mangaluru for specialised treatment. Despite medical efforts, she passed away while undergoing care.

Preksha was a student at Karavali College, Vamanjoor on the outskirts of Mangaluru city. The tragedy is compounded by the fact that she belonged to a financially vulnerable family, having previously lost her father. She is survived by her mother and brother.

A case related to the accident has been registered at the Padubidri police station, and an investigation is underway to determine the exact circumstances that led to the collision. The incident highlights the growing concerns over road safety, particularly on busy service roads, and serves as a tragic reminder of the human cost of traffic accidents.

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News Network
December 5,2025

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New Delhi, Dec 5: IndiGo CEO Pieter Elbers issued a public apology this evening after more than a thousand flights were cancelled today, making it the "most severely impacted day" in terms of cancellations. The biggest airline of the country cancelled "more than half" of its daily number of flights on Friday, said Elbers. He also said that even though the crisis will persist on Saturday, the airline anticipates fewer than 1,000 flight cancellations.

"Full normalisation is expected between December 10 and 15, though IndiGo cautions that recovery will take time due to the scale of operations," the IndiGo CEO said. 

IndiGo operates around 2,300 domestic and international flights daily.

Pieter Elbers, while apologising for the major inconvenience due to delays and cancellations, said the situation is a result of various causes.

The crisis at IndiGo stems from new regulations that boost pilots' weekly rest requirements by 12 hours to 48 and allow only two night-time landings per week, down from six. IndiGo has attributed the mass cancellations to "misjudgment and planning gaps".

Elbers also listed three lines of action that the airline will adopt to address the issue.

"Firstly, customer communication and addressing your needs, for this, messages have been sent on social media. And just now, a more detailed communication with information, refunds, cancellations and other customer support measures was sent," he said.

The airline has also stepped up its call centre capacity.

"Secondly, due to yesterday's situation, we had customers stranded mostly at the nation's largest airports. Our focus was for all of them to be able to travel today itself, which will be achieved. For this, we also ask customers whose flights are cancelled not to come to the airports as notifications are sent," the CEO said.

"Thirdly, cancellations were made for today to align our crew and planes to be where they need to start tomorrow morning afresh. Earlier measures of the last few days, regrettable, have proven not to be enough, but we have decided today to reboot all our systems and schedules, resulting in the highest numbers of cancellations so far, but imperative for progressive improvements starting from tomorrow," he added.

As airports witnessed chaotic scenes, the Directorate General of Civil Aviation (DGCA) stepped in to grant IndiGo a temporary exemption from stricter night duty rules for pilots. It also allowed substitution of leaves with a weekly rest period. 

Civil Aviation Minister Ram Mohan Naidu has said a high-level inquiry will be ordered and accountability will be fixed.

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