Sedan OR SUV? Tax Confusion Leads To Price Hike


Recently we have seen and heard that budget has hammered the SUV buyers and makers. The government has levied a three percent increase on tax 27 to 30% on the gaudy SUV’s. The segment has impacted a lot when the government official said that it is a wiser decision of levying the tax on SUV’s.

The tax rule got opposite and heavier for the sedan segment too. Yes! One must be thinking after reading how, but then as government has not defined any set classification for the rule that is why some sedans form the auto makers are also getting impacted under the rule. The Maruti Suzuki SX4, Fiat Linea and Toyota Corolla Altis came under the tax rule. So this factor led a rise in the car prices by 15 to 35 thousand and due to this a bit of sedan sales fell down.

Sedan Or SUV

The government is now game for a change in the rule, because the dice comes in the end in government’s camp. As they also know if they have to roll their wheels than they have to keep hands joint with the big giants of the country.  A new concept of two box vehicles will be introduced soon by the officials. This rule will segregate the sedans and hatch backs from SUV’s.

As per the recent budget announcement any car longer than 4 meters comprising larger than 1.5 liter of engine and more than170 mm of ground clearance will be going to come under the higher tax segment. If we see there are loads of sedans which are above than these specifications in order to deal with the auto world’s competition, and the correction of the rule will lead to market sales and growth which is necessary.

The society of Indian Automotive Association has approached the Government especially finance department to discuss and resolve this issue because after the rule there has been large fall in the car sales. If we see ratios and reports then a 26% of the fall has been counted and mentioned as the highest in the decade ever. The sedan segment also got a massive hit by this rule so in order to get the train on the track government has to rectify the rule as by a new two box concept. We are really surprised to see this up and downs for consumers.