Volkswagen India has increased the prices of the Volkswagen Vento sedan and the Volkswagen Tiguan SUV owing to the Goods and Services Tax (GST) cess hike announced for luxury cars, SUVs, and mid-sized cars recently. The prices have been revised across variants for both Volkswagen models. Prices of the Volkswagen Vento have gone up by Rs 4,000 for the base Volkswagen Venti Trendline petrol model to Rs 9,000 on the Volkswagen Vento Highline Plus AT diesel variant. The price hike on the Volkswagen Tiguan is significant with the Comfortline variant now dearer by Rs 93,000, while the Highline trim will now cost Rs 1.04 lakh more. The Volkswagen Polo hatchback, meanwhile, has not faced any price revision on account of the variable GST cess hike.
The announcement comes as Volkswagen prepares to launch its India-made Volkswagen Passat in the country, which will compete with the Honda Accord, Skoda Superb, and Toyota Camry. The new variable GST cess rates for SUVs, luxury cars and mid-sized vehicles were decided by the GST Council on September 9, 2017. As per the decision, the 15 per cent cess in addition to 28 per cent GST on SUVs will be increased by 7 per cent, on luxury cars by 5 per cent and on mid-sized cars by 2 per cent, meaning that cars in each category will now be priced that much higher, respectively.
Car manufacturers had earlier anticipated an across-the-board hike in GST cess from 15 per cent to 25 per cent. With this announcement, the total incidence of tax on SUVs will go up to 50 per cent (28 GST, 15 cess, 7 added cess), 48 per cent for luxury cars (measuring more than 4m, and engines larger than 1,500cc for diesel and 1,200cc for petrol), and 45 per cent for mid-sized cars.