GST: Hyundai seeks definition of ‘luxury’ from Centre

The Hindi Business Line By OUR BUREAU AUGUST 22, 2017

YK Koo, MD and CEO, Hyundai Motor India, at the launch of the fifth generation Verna, in New Delhi on Tuesday

Launches new Verna priced ?8-12.62 lakh

The country’s second-largest passenger car manufacturer, Hyundai Motor India (HMIL), on Tuesday sought clarity from the government on the extra cess planned to be levied on large cars and sports utility vehicles (SUVs).

It also sought a clear definition of ‘luxury’ and how it is defined for taxation purpose under the Goods and Services Tax regime that kicked off on July 1.

“We don’t know what’s going on. What is the definition of luxury? We are waiting for the final decision on GST,” YK Koo, Managing Director and Chief Executive Officer, HMIL, told reporters here on the sidelines of the launch.

Koo was indicating the fact that under the current GST rates, Hyundai cars, such as Verna and Elantra, attract the same rate as the luxury models from Audi, BMW, Jaguar Land Rover and Mercedes-Benz.

However, in the pre-GST regime, these models had attracted a lower tax rate than other luxury vehicles.

“We are a little confused. There is a need for more clarity from the GST Council regarding the definition of various provisions, such as engine size and vehicle length,” Koo said, adding that only then could one understand the need for paying extra tax.

Cess hike

Under the GST regime, large cars and SUVs with engine capacity of more than 1500cc with a length of more than four metres attract a cess of 15 per cent, in addition to the top tax rate of 28 per cent. The GST Council has approved a proposal to hike cess on these from 15 per cent to 25 per cent.

The decision on when to raise the actual cess to be levied on the same will be taken by the Council in due course.

HMIL on Tuesday launched its fifth generation Verna priced ?8-12.62 lakh (all ex-showroom, Delhi).

Available in petrol (1.6L VTVT) and diesel (1.6L U2 CRDi) engine options, both models will have six variants each — four with manual transmission and two with automatic transmission. While the petrol variant is available at ?8-11.09 lakh, the diesel variant is priced ?9.20- ?12.62 lakh (ex-showroom). However, these prices will be introductory and apply only for the first 20,000 customers.

The company will then review the prices.

The company said the petrol version gives 17.70 kmpl (for manual transmission) and 15.92 kmpl (for AT); the diesel version gives 24.75 kmpl (MT) and 21.02kmpl (AT) as per test conditions.

The new Verna is developed with “futuristic design, dynamic performance, super safety and new technology and advanced features,” the company said.

engineered to deliver excellence in all core areas of styling, performance, technology and safety, creating a new benchmark in the sedan segment,” Koo said at the launch.

The company has sold more than 3.18 lakh units of Verna since it was first launched in 2006.

It expects to sell 4,000-5,000 of the latest model per month, he added.

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