Government Should Take Pragmatic Decision For Levy Of Cess On Large Cars

German luxury car maker BMW on Friday said that the government should take a "pragmatic decision" on its proposal to introduce cess for SUV and large cars as the move could slow down the growth in premium car market. SUVs, mid-sized, large and luxury cars that had become cheaper after GST rollout on July 1 will cost more as the GST Council last week approved a proposal to hike cess on them to 25 per cent, from 15 per cent now.

Also Read: GST Impact: Car Buyers To Bear Burden Of Additional Cess

"It has not happened as yet. They are discussing. So very difficult to say what it is at the moment. We just heard that they want to look at it. When they want to do it and how it will happen it is not clear," BMW India, President, Vikram Pawah told PTI here.

Under the new GST regime, cars attract the top tax rate of 28 per cent. On top of this, a cess of 1-15 per cent is levied to create a corpus to compensate states for loss of revenue from GST implementation. Hoping that the government will take a "pragmatic decision", Pawah said if the rates remain same, there will be a growth in the premium car market that means overall revenue for the government will increase.

Also Read: SUVs, Luxury SUVs To Cost More As GST Council Approves Hike in Cess

"If the cess or anything increased, supposedly, then that might slow down the growth of this market and then there will be a revenue loss for the government. We are really hoping that the government will look at it," he said.

Stating that he was "surprised" and "shocked" about the levying cess, Pawah said, "It is only one month after introducing the GST. How can you suddenly change after one month? We (automobile manufacturers) don't understand that. That is why we are requesting the government to have a look at it. Have a pragmatic view towards it and let's make sure that we are looking at a long term. We as manufacturers are here to contribute to the society and increase the market," he said.

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Responding to a query, he said the car makers through Society of Indian Automobile Manufacturers (SIAM) took up the issue and were yet to receive a response from the government.

Pawah added, "Yes we have taken the issue through the industry bodies through SIAM. We have not heard anything. We are happy to have a dialogue. Make sure our voices are heard. We strongly believe that current GST structure is a very good structure which would actually lead to higher revenue generation for the market."

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)