The Lok Sabha has approved a bill to hike Cess on luxury vehicles and hybrids from 15 per cent to 25 per cent, which is claimed to compensate the states for revenue loss following the GST rollout.
The Cess will be applicable on the 28% base tax that is already levied on cars, which brings the total luxury vehicle tax to 53% – pretty much back to pre-GST levels.
Back in September, the GST Council had revised the rates and issued multiple brackets of 17 or 20% on mid size and 22% for luxury and SUVs.
While the auto industry begged to reduce the tax on hybrids, the Government seems to have made it worse by increasing it even further. The Government had previously said that they’re not interested in hybrids.
Toyota even stopped production of Camry Hybrid in the country due to steep GST.