Mercedes-Benz became the first car manufacturer to pass on the benefits of the goods and service tax (GST) to the customers. The German manufacturer has reduced 4% on the made in India cars. The price reduction will be effective on CLA, GLA, C-Class, C-Class, E-Class, S-Class, GLC, GLE, GLS and Mercedes-Maybach S500.
More expensive vehicles received a bigger price cut. The cheapest of the lot, CLA will receive a reduction of Rs. 1.4 lakh while the most expensive Mercedes-Maybach S500 will get a price reduction of Rs. 7 lakh.
The current duty structure, the buyer of any luxury car or any other big car, including SUVs, pay a duty up to 55% of the factory gate price. With the new GST structure, the maximum cess on the luxury cars will be likely around 43%.
Speaking on the announcement, Roland Folger, Managing Director & CEO, Mercedes-Benz India commented, “As a customer-centric initiative, we are now passing on the benefits of post-GST pricing of our ‘Made in India’ cars with immediate effect. To ensure complete peace of mind for our customers, we have decided to pass on the GST tax benefits at an earlier stage at our cost. This approach will benefit the customers who want to purchase a locally produced Mercedes-Benz from now on and during the month of June. The impact on the prices on CBU vehicles is yet to be evaluated. We think the implementation of the GST structure is a landmark achievement for the Indian economy, which will support the ease of doing business in India. We are also confident that post GST implementation; there will be growth momentum in the luxury car industry.”
The price reduction of the entire ‘Made in India’ portfolio ranges from 2% to 9% depending on the tax structure and local body taxes of the state. The weighted average of this is a price reduction of 4% on transaction prices of customers.