Cars more taxed than cigarettes in India: Honda cars

Chandigarh: Car major Honda Cars India on Thursday said that there is a “high” incidence of taxes on  automobile sector, saying “cars are more taxed than  cigarettes” in the country. “Today if you look at incidence of taxes on car whether  it is excise duty, CST, calamity tax, education cess, VAT,  road tax.. if you look at all these taxes on car, probably  cars are more taxed than harmful things like cigarettes...  taxation is extremely high,” Honda  senior vice-president  (marketing and sales), Jnaneswar Sen told reporters here.

Mr Sen said that incidence of tax might be ranging between 50-70  per cent depending on cars. The highest tax on cigarettes is reportedly levied in Rajasthan at 65 per cent. Citing an example, he said, “If we are selling car at Rs 100, which is coming from a factory, customers are probably  purchasing at Rs 150 to Rs 175 due to most of these taxes. Except transportation cost and dealers margin, the rest is tax which is 50-70 per cent.” He also rued about the fact that there was no uniformity  in rates of taxes in the states.

“In some states, VAT rate is 12.5 per cent and in some  other places, it is 14.5 per cent. Road tax is four per cent at  one place and it is 16 per cent,” he said. Mr Sen also underscored the need for more clarity on the  subsidy being given on diesel. “We have invested in diesel cars but many players are thinking whether to invest or not (in diesel). What will happen we do not know. There is  no clarity (on whether diesel subsidy will continue),” Mr Sen averred.