When You Buy A Top-End Hyundai Creta, You Pay Around Rs 11 Lakh In Taxes: CA's Calculation Is Going Viral
We are sure that most of us who have bought a car or are planning to buy one would have noticed that car prices have gone up over the years. Even a small hatchback like the Maruti Alto K10 now costs over ₹7 lakh on-road in many parts of the country. The cost of raw materials and operational expenses are to be blamed, but there is one more factor we often overlook in such cases and that is taxes. This amount varies for different cars as they are priced differently.
Recently, a CA’s calculation on this topic went viral on the internet, where he revealed that around ₹6 lakh is paid in taxes to the government on the ex-showroom price of a Hyundai Creta SUV.
The post was shared by CA Arvind C. Thomas on LinkedIn. In his post, he mentions that he recently came across the invoice of a Hyundai Creta SX(O) IVT petrol version. On this particular invoice, he was surprised to see the price of the SUV even before it was registered for the road. The ex-showroom cost of the SUV was mentioned as ₹18.73 lakh.
What was more interesting was that this was not the actual cost of the vehicle. The cost of the vehicle as per the invoice was only ₹12.91 lakh. On this amount, the customer was offered a discount of ₹11,000, and ₹12.80 lakh was taken as the taxable amount.
On this amount, both state and central governments charge GST of 14 percent each (which is 28 percent in total). Both the state and the central government receive ₹1,79,325.52 each as GST.
Additionally, on the same taxable amount, the government charges a 17 percent compensation cess, which amounts to another ₹2.17 lakh. This brings the price of the Hyundai Creta to ₹18.57 lakh. On this amount, there is a 1 percent TCS, which brings the cost of the car to ₹18.75 lakh.
It should be noted that this is just the ex-showroom cost of the car. After this, the owner has to pay for road tax and vehicle registration. He or she will also have to purchase insurance, which is another expensive affair.
With this post, the social media user is raising questions like: “Are we buying a car or just helping the government fill its coffers?
With taxes this high, upgrading a vehicle feels more like a luxury than a necessity. The middle class keeps paying silently, and no one bats an eye.
Maybe it's time we start talking about this.”
Most people who came across the post have left comments that align with the sentiments and concerns of the social media user. So, if you look at the numbers, a top-end Hyundai Creta petrol IVT in Kerala would cost around ₹23 lakh on-road, and out of this ₹23 lakh, the actual cost of the car is only half.
The rest is mostly taxes and other charges required to make your vehicle legal on the road. What are your thoughts on this? Do let us know in the comments section.