Cars costing over Rs 10 lakhs could get more expensive
According to a new directive by the Central Board of Indirect Taxes and Customs (CBIC), Indians will have to shell out more for cars priced above Rs 10 lakh.
This comes after a government clarification that GST is payable on the invoice value of the car as well as the tax collected at source as income tax. Consequently, buyers will now have to additionally pay GST on the value of tax collected by the dealer and not just on the value of the car sold.
A CBIC circular said, "It is clarified that taxable value for the purposes of GST shall include the TCS amount collected under the provisions of the Income Tax Act since the value to be paid to the supplier by the buyer is inclusive of the said TCS."
Currently, the GST rate is set at 12 per cent for electric vehicles while other passenger vehicles pay at a 28 per cent rate. A further 15 per cent compensation cess is charged on cars longer than four metres. For sub-four-metre petrol and CNG cars, this reduces to one per cent, while diesels pay three per cent.