Luxury carmakers believe that high taxation in Auto sector is affecting the growth of the sector. Many Luxury carmakers  Mercedes-Benz, Audi and Lamborghini sought a reduction in taxes on automobiles in the upcoming Budget.

 The carmakers asked the government to lower taxes on automobiles in the upcoming Budget, saying the premium segment of the auto industry has not been able to grow due to high taxation besides being hit hard by a coronavirus. According to the companies, any hike in taxes on luxury cars will hit demand and prevent recovery from the disruptions witnessed last year. Mercedes-Benz India Managing Director & CEO Martin Schwenk told PTI, "Anything which is a deterrent to the demand in the sector we should stay away because at the end that will cause the problem."

Talking about current taxation, automobiles are taxed at 28 per cent GST with additional cess ranging from 1 per cent to 22 per cent depending on the type of vehicle. Cars imported as a completely built unit (CBU) attract customs duty ranging between 60 per cent and 100 per cent depending on engine size and cost, insurance and freight (CIF) value being less or above USD 40,000.

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