Export of big cars, SUVs may lose speed under GST

Companies are required to block substantial cash for paying the 15% cess

The export of bigger cars and sport utility vehicles (SUVs) from India could slow under the goods and services tax (GST) regime, as companies are required to block substantial cash for paying the 15 per cent cess. While this can be reclaimed as a refund, the situation will turn more challenging when this cess is hiked to 25 per cent. Blocking sizeable funds in the process will bring down the competitiveness of companies like Volkswagen, Nissan and Hyundai, among others, in the export market. 

Exporters have the option of shipping cars without paying the GST or cess against a bond