There are as many as car models whose price will increase including Sedans, luxury car segment and SUVs. This shall be effected after the ministry has proposed to increase the cess for all the cars not classified as small car from the current 15% to 25%.
Though the effective date for such an implementation has not been made by the government, analysts expect it to be brought in anytime in the next month.
Nonetheless the implementation per se higher cess rate shall not be effected before September 9 meet of the GST Council in Hyderabad. The sudden change in cess will be reflected in the price of over 50 models and be seen in cars having a petrol engine of capacity over 1.2 litre and diesel of over 1.4 litres which are having length of over 4m. The price dropped for these cars with the implementation of GST on a nationwide basis by as much as 10-15%.
The increase in price by approximately 10% is set to come in at a time when the festive season is set to kick in and which brings as much as 50% sales of the annual sales for the dealers.
An executive with a leading car manufacturer says, "The automobile sector is repeatedly getting targeted on the issue of taxes. We welcomed GST on July 1 thinking it will lead to simplification to operations but we are back to the same sentiments as pre-GST days. This will once again create an anomaly in demand as buyers will once again flock to showroom to avoid the hike".