Honda believes hike in cess to impact growth of advanced global models in India

Implementation of GST from July 1 had a considerable effect on the auto industry in the country. this time around, Honda Cars India Ltd (HCIL) President and CEO Yoichiro Ueno has said that the move to hike ceiling of cess on large cars and SUVs to 25 per cent under the new GST regime would impact growth of advanced global models in India and could come in the way of the country becoming global hub for automobile production.

Although the company has welcomed the governments tax reform achieved through GST implementation, Yoichiro Ueno said, “The latest government move to increase the ceiling on the additional cess on automobiles from 15 per cent to 25 per cent on larger cars and SUVs, is a big disappointment.” He believes that the move will be bias towards small cars.

Currently, large cars and SUVs attract top GST rate of 28 per cent with a cess of 15 per cent. However, earlier this month the GST Council approved a proposal to hike cess on them to 25 per cent. Adding further Uno said, “If vehicles produced in India are very different from global trend, it will also impact the development of the Indian automobile industry. It makes export of both CBU vehicles and auto components more difficult and poses hurdles to India in the way of becoming global hub for automobile production.”

More details on the cess hike and its implications will be known in the days to come.