German luxury car maker BMW today said that the government should take a "pragmatic decision" on its proposal to introduce cess for SUV and large cars as the move could slow down the growth in premium car market.
"It has not happened as yet. They are discussing. So very difficult to say what it is at the moment. We just heard that they want to look at it. When they want to do ti and how it will happen it is not clear", BMW India, President, Vikram Pawah told PTI here.
SUVs, mid-sized, large and luxury cars that had become cheaper after GST rollout on July 1 will cost more as the GST Council last week approved a proposal to hike cess on them to 25 per cent, from 15 per cent now.
Also Read
Under the new GST regime, cars attract the top tax rate of 28 per cent. On top of this, a cess of 1-15 per cent is levied to create a corpus to compensate states for loss of revenue from GST implementation.
Hoping that the government will take a "pragmatic decision", Pawah said if the rates remain same, there will be a growth in the premium car market that means overall revenue for the government will increase.
"If the cess or anything increased, supposedly, then that might slow down the growth of this market and then there will be a revenue loss for the government.", he said.
"We are really hoping that the government will look at it.." he said.
Stating that he was "surprised" and "shocked" about the levying cess, Pawah said, "it is only one month after introducing the GST. How can you suddenly change after one month. We (automobile manufacturers) dont understand that.".
"That is why we are requesting the government to have a look at it. Have a pragmatic view towards it and lets make sure that we are looking at a long term. We as manufacturers are here to contribute to the society and increase the market", he said.
"this (cess issue) might be counter productive for that..", he said.
Responding to a query, he said the car makers through Society of Indian Automobile Manufacturers (SIAM) took up the issue and were yet to receive a response from the government.
"Yes we have taken the issue through the industry bodies through SIAM. We have not heard anything. We are happy to have a dialogue. Make sure our voices are heard.", he said.
"We strongly believe that current GST structure is a very good structure which would actually lead to higher revenue generation for the market", he said.
Disclaimer: No Business Standard Journalist was involved in creation of this content
