Disappointed over the frequent tinkering with taxes and regulations, luxury car-maker Mercedes-Benz India says it could “easily double the volume and add to the number of jobs” if the taxation approach to the segment turns more conducive and stable.
Despite a tough environment, the Pune-based Mercedes-Benz was on a roll till September selling 20% more units at 11,869 compared with the year-earlier period, primarily driven by the pre- and post-GST boost when the effective tax rates initially came down to 43%.
But the euphoria was short-lived as the GST Council in September jacked up the “sin cess” on large cars by 700 basis points to 50%, blunting the all-important festival sales not just for luxury cars but for the entire car segment.
“There has to be a radical change in the very approach to taxation in this country. I just don’t understand why there’s a sin tax on luxury cars,” Roland Folger, MD & CEO of Mercedes-Benz India said. “If [the] government can rationalise and bring in certainty to the taxation regime, if not bring it down, we can easily double our volumes and also add on to the number of jobs in just about two years,” he said.
