Luxury Car and Mid-Size Cars like to have a Price Cut

Finally there is some good news to hear. It is speculated that there is chances of car prices coming down. Hold on not all the cars this is related only to sedans and the luxury cars. It is said that the government is there will be price cut up to Rs 50,000. There is no confirm news on this as the ministry of heavy industries is in talks with finance ministry to reduce the specific excise duty charged on mid-size and top-end cars last year.

How did the tax procedure worked earlier for these cars?

It was mandatory for the car’s engine sized between 1,500-2,000cc to pay an additional tax of Rs 15,000 and the vehicles above 2,000cc have to pay Rs 20,000.  But as the tax was forced on ex-factory price of vehicles, the car manufacturers put the load on the consumers in the form of sales tax and other taxes. Now it is realized that such kind of tax planning does not make any sense in terms of some particular segment.

Such unfriendly tax structure affected the sales it discouraged the consumers from buying cars like Honda Civic and the Toyota Corolla. By calming down the tax structure, the price on these car segments will come down by Rs 20,000 to Rs 50,000 per car.