In the wake of the Budget 2023-24, the automobile industry is bracing for a significant change that could have a direct impact on car prices. The impact is for 1300cc and above used and old cars with Asia Make. The new policy outlined in the budget indicates a shift in custom duty rates for these very cars, where MSRP (original price in car’s original country) will now vary according to the variant or trim of the vehicle. This alteration implies that consumers can expect to face higher prices for different car models, reflecting the custom duty levied on each variant.
The custom duty structure for these cars up to 1800cc has traditionally been uniform across different models. However, the budgetary measures for the fiscal year 2023-24 have introduced a significant departure from this standard. Under the new policy, the custom duty will vary based on the variant or trim level of these vehicles. This change is aimed at creating a more nuanced approach to taxation, taking into account the specifications and features of each model.
The Consequence
As a direct consequence of the new policy, consumers can anticipate an increase in these car prices. The differentiation of custom duty rates according to variant or trim level will lead to varying price tags for each car model. Typically, higher-end variants with more advanced features and enhancements will be subject to higher custom duties, resulting in a steeper price hike compared to base models.
While this change may concern prospective buyers, it is essential to understand the rationale behind it. By implementing a variant-specific custom duty structure, the government aims to ensure a fairer taxation system that aligns with the value and luxury associated with different vehicle variants. This measure also aims to streamline revenue generation and strengthen the domestic automobile industry.
Furthermore, the industry experts believe that the government is planning to impose a7% Additional Customs Duty (ACD) these imported cars, which would also lead to a price hike. The things would be clearer in next couple of days and we will know for certain about this whole situation.
Impact On Auto Industry
The automotive industry is likely to experience both short-term and long-term effects as a result of the new policy. In the short term, car manufacturers may witness a temporary dip in demand due to the price escalation. Consumers, particularly those considering higher-end variants, may reassess their purchase decisions or opt for lower-priced alternatives to avoid the increased costs.
