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Luxury vehicle manufacturers’ disappointed over move to hike cess ceiling

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Mumbai/Chennai, Aug 7 : Luxury vehicle manufacturers on Monday expressed their disappointment over GST Council’s recommendation to the central government for a hike in maximum cess ceiling leviable on luxury, sports utility vehicles (SUVs) among others.

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The Ministry of Finance in a statement said that decision to recommend a hike in the “maximum ceiling of cess” was taken at the Council’s meeting on August 5.

“The GST Council considered the issue of cess leviable on motor vehicles in its 20th meeting held on August 5 and recommended that central government may move legislative amendments required for increase the maximum ceiling of cess leviable on motor vehicles falling under headings 8702 and 8703 including SUVs, to 25 per cent instead of present 15 per cent,” the ministry said in a statement.

“However, the decision on when to raise the actual cess leviable on the same would be taken by the GST Council in due course,” it said.

The ministry revealed that the decision to recommend a hike in cess cap was taken after the Council noticed that post the roll-out of GST, the total tax incidence on motor vehicles had come down as compared to pre-GST regime.

On industry’s side, luxury car maker Mercedes-Benz India voiced its disappointment.

“We are highly disappointed with the decision. We believe this will be a strong deterrent to the growth of luxury cars in this country,” Roland Folger, MD and CEO, Mercedes-Benz India, was quoted as saying in a statement issued by the company.

“As a leading luxury car maker, this will also affect our future plans of expansion under ‘Make in India’ initiative, which aims at making and selling world-class products in India, with the latest technology for end-consumers,” he added.

Folger pointed out that the recommendation will reverse the positive momentum that the industry wanted to achieve with the introduction of the GST.

“With this hike in cess, we expect the volumes of the luxury industry to decelerate, thus offsetting any growth in the potential revenue generation that could have come with the estimated volume growth,” Folger said.

He also called for the need for a long-term road-map for the luxury car industry in India.

“The constant shift in policy makes our long-term planning for the market highly risky, and we think this would only have an adverse impact on the country’s financial ratings,” Folger said.

On its part, Audi India announced a sales offer on a range of models including Audi A3, Audi Q3 and Audi A4.

“Keeping in mind the proposed increase in cess, this is an opportune time to join the Audi family and additionally also benefit from the privileges of the Audi India club,” said Rahil Ansari, Head Audi India.

According to Shrikant Akolkar, Research Analyst- Automobiles, Angel Broking: “The likely hike in the cess rate from current 15 to 25 per cent is not expected to see a materially negative impact on the demand for the premium automobiles.”

“The underlying demand remains healthy which is the driving force for the automobile sector. We believe that companies will be able to pass on the cess hikes on luxury vehicles/UVs to customers by price revision.”

Further, Suresh Nandlal Rohira, Partner, Grant Thornton India LLP said: “The increase in compensation cess on luxury cars from 15 per cent to 25 per cent is purely an attempt of anomaly correction by the government on realising the revenue loss it would undergo.”

“Although, it would take away the luxury for higher segment car buyers with an additional tax burden of 10 per cent, however such frantic changes and corrections for each sector may convulse the confidence of the Industry and also lead to re-planning of their sales strategy and cost impact thereon.”

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Army, Navy rescue marooned people in Karnataka’s flood-hit district

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Srirangapatna flood

Bengaluru, Aug 17 (IANS) Indian Army troops and Navy divers joined the national and state disaster relief forces to rescue hundreds of people marooned in Karnataka’s flood-hit Kodagu district, said an official statement on Friday.

“About 60 Dogra Regiment soldiers and 12 expert naval divers rescued 873 marooned people in the flood-hit district, where overnight heavy rains caused landslides and inundated low-lying areas at Makkanduru,” said the statement from the Chief Minister’s office here.

Kodagu, about 250 km from Bengaluru, is one of the districts in the southern state worst hit by the south-west monsoon rains since June first week.

The Army’s engineering task force deployed 73 boats, equipment and rafts in rescuing the people and escorting them to safer places in the district.

About 60 members of the national and state disaster relief forces and 45 members of the civil defence joined the rescue and relief operations with boats and equipment in Madikeri in the hilly district.

“Though the Indian Air Force (IAF) aborted rescue mission due to inclement weather, it will fly M17 chopper from Mysuru on Saturday to rescue the remaining stranded and transport relief supplies,” noted the statement.

About 200 personnel of the state fire service had rescued people in flood-hit towns and villages across the district with their boats and equipment.

“Telecom services, disrupted due to rains and strong winds uprooting poles and snapping phone lines, are being restored on priority. HAM operators have been deployed as back-up. Power lines are also being restored,” said the statement.

The district administration has housed 573 persons in 17 relief camps.

Intra and inter-state bus and train services between Karnataka and flood-hit Kerala were suspended due to landslides and rain water submerging the highways and roads in the ghat section.

State-run and private bus services from Mysuru and Chamarajanagar to Ooty and Coonoor hill stations in Tamil Nadu were suspended due to flooding and fallen trees blocking the routes in the ghat section.

According to the weather office, rain fury continued in the state’s coastal districts of Dakshina Kannada, Udupi and Uttara Kannada, disrupting normal life, including vehicular movement of goods and people.

Incessant rains lashed the Malnad region, flooding several areas in Shivamogga, Hassan and Chikkamagaluru districts.

Schools and colleges will remain shut even on Saturday in the affected districts due to flooding and disruption of bus services.

The state’s metrological department has warned of moderate to heavy rain in coastal, south interior and north interior areas of the state till Sunday.

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Oil prices rises after sharp declines

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Crude Oil

New York, Aug 18 (IANS) Oil prices continued to rise slightly on Friday after slumping over 2 per cent earlier this week.

The West Texas Intermediate (WTI) for September delivery rose $0.45 to settle at $65.91 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery rose $0.40 to close at $71.83 a barrel on the London ICE Futures Exchange, Xinhua reported.

The market was under pressure earlier in the week as official data showed the US crude inventories rose nexpectedly recently.

The Energy Information Administration said in its weekly report on Wednesday that US commercial crude inventories rose by 6.8 million barrels in the week through August 10, way higher than market estimates of a decrease of 2.5 million barrels.

WTI and Brent oil prices rebounded slightly on Thursday and Friday after touching the lowest levels in months on Wednesday.

On the data front, the number of US oil drilling rigs were unchanged this week at 869 rigs, according to a weekly report from energy company Baker Hughes on Friday.

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Nifty sets new closing high on firm global cues; Sensex ends near 38,000

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sensex up

Mumbai, Aug 17: Broadly positive global cues lifted the key Indian equity indices on Friday with the NSE Nifty50 ending at a record closing high of 11,470.75 points.

According to market observers, healthy buying activity was witnessed in banking, metal and healthcare stocks.

At 3.30 p.m., the Nifty50 on the National Stock Exchange provisionally closed at 11,470.75 points, up 85.70 points or 0.75 per cent from its previous close.

The benchmark S&P BSE Sensex, which had opened at 37,898.60 points, closed at 37,947.88 points up 284.32 points or 0.75 per cent from previous close of 37,663.56 points.

It breached the 38,000 mark during the day and touched an intra-day high of 38,022.32 points, and hit an intra-day low of 37,840.16 points.

The major gainers on the Sensex were Yes Bank, State Bank of India, Vedanta, Hindustan Unilever and Tata Motors, while Hero MotoCorp, ONGC, Maruti Suzuki, Coal India and Power Grid were the major losers.

IANS

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