GST Impact: SUVs Prices Increased Due to Cess Hike

SUV fans in India got their biggest disappointment through this recent hike of cess on existing GST of 43%. From September 11, the effective GST on SUVs is 50%, resulting in steep price hikes for every model that falls in the SUV category.

The most popular model on sale, Jeep Compass, receives a price hike of INR 21,000-72,000. This makes top spec 4×4 Compass good for a price tag of INR 21.37 lakh. The rise went forward to CBU models too, pushing their prices up by INR 2,75,000-6,40,000 for Wrangler and Grand Cherokee.

Hyundai India’s most popular SUV model, Creta, is now dearer by INR 20,900-55,375. If that seems small, Hyundai Tuscon got an even worst hike between INR 64,828-84,867. In terms of on-road price, one could expect top spec Tucson to get INR 1 lakh of total hike.

Ford Endeavour was another victim of this 7% cess hike, resulting in a price hike that pushed 2.2L 4×2 Titanium model to INR 28.34 lakh. It was priced at INR 26.95 lakh few days before this hike. The increase in price is even more visible on the top spec 4×4 variant which is now priced @ INR 31.40 lakh.

Innova Crysta and Fortuner were two highly affected models in Toyota’s lineup, pushing both the cars higher by INR 72,000 and INR 1,60,000 respectively. This will definitely affect the decision making of buyers in this segment.

Isuzu is one among the worst hit brands as all their cars fall under the SUV segment. MU-X is now priced at INR 23.58 lakh for 4×2 and 25.54 lakh for the 4×4 model. Not just that, V-Cross now even costs 13.17 lakh in Delhi. Revised prices for Land Rover cars now starts at INR 42 lakh for 2.0L Diesel Discovery Sport.

Volkswagen Tiguan was currently priced under INR 30 lakh but after the increase, the top spec model is expected to cross INR 31 lakh mark. Tata Motors too felt the heat and hence, Hexa now sells for INR 17.19 lakh for the top spec model.

Renault Duster and Nissan Terrano now even fall under the 50% tax bracket, witnessing almost the same increase in price as Hyundai Creta. Mahindra is yet to update the prices of all models while one can safely assume a hike of around INR 50,000 on the top spec XUV500.

Luxury car manufacturers like BMW, Mercedes and Audi are also among the biggest affected brands with the most basic model receiving INR 1.20 lakh of price hike. BMW X6M was earlier priced at INR 1.68 crore while new tax slab takes the same higher to INR 1.78 crore after September 11, 2017

The change in taxation was not welcomed by automobile manufacturers as they felt that slowdown in festive sales would bring loss in revenue for almost all of them. Still, some of them feel safe after getting 7% hike instead of the proposed 10%.