Key highlights:

  • Impending increase in cess from 15% to 25% on larger vehicles poses challenge, says ICRA
  • Passenger vehicle industry will grow by a healthy 9-10% during FY18
  • The price cut post GST had aided the growth in the passenger vehicle segment

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The passenger vehicle industry will grow by a healthy 9-10% during FY18 and between 9-11% at a Compounded Annual Growth Rate (CAGR) over the next five fiscals.

However, the GST Council's decision to increase in the cess on passenger vehicles over 4 metres to 25% from 15% poses a challenge and could derail demand momentum in the interim, according to a recent ICRA report.

“Impending increase in cess from 15% to 25% on larger vehicles poses challenge and could derail demand momentum in the interim,” said the report.

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
  • Why hike in GST cess on luxury cars may dent investment, auto jobs in India