Key highlights:

  • Union Cabinet is expected to soon consider the GST Council's decision to increase the GST cess on large cars
  • Mahindra to be impacted the most due to its large exposure to these segments
  • Nearly 40% of Mahindra's vehicles belong to the utility vehicles portfolio

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While the hike in the goods and service tax (GST) cess will hit manufacturers of SUVs, luxury cars and other large cars, the most to be hit by this is Mahindra & Mahindra (M&M), according to analyst Ashvin Shetty said in an Ambit Capital report.

The Union Cabinet is expected to soon consider the GST Council's decision to increase the cess on mid-size and large cars to 25% from the 15% cess currently. This is expected to increase the tax on cars to even higher than the pre-GST levels.

SUVs, luxury cars to get expensive as GST Council recommends hike in cess to 25%

  • Luxury car makers voice disappointment over GST Council's increase in cess
  • Hike in GST cess on larger passenger vehicles could derail demand momentum: ICRA