The latest issue surrounding premium electric automobiles has brought the government of India's GST Policy back into the limelight and sparked yet another discussion. The problem is concerns the tax discrepancy between premium EVs and basic petrol automobiles, making it an issue broadly and directly affecting the public.
 
At an astounding ₹2.38 crores, the bmw i7 M70 has an astonishingly low marginal GST rate of only 5%. The rate, when expressed in absolute terms, equals just ₹11.9 lakhs in GST. Now, this might not seem like much, but when contrasted with the GST rate on regular gasoline automobiles that come with CESS—which ranges from about 29% to a staggering 50%—it becomes glaringly obvious. For example, the On-road pricing of the ₹39.55 lakhs Innova Hycross, which was originally priced at ₹20.65 lakhs, is over twice as much!
 
India's luxury electric vehicle tax benefits surpass those of wealthy nations. The tax discount on the i7, which is worth ₹1.52 crores, is so large that it shames the industrialized nations. If not for these tax benefits, there could have been six new buses on the road for every i7 sold. It goes on from here. Additionally, the tax rates on upgrades and modifications of these ultra-luxury EVs are only 5%, which makes them an attractive option for the wealthy and exacerbates the already significant economic inequality.
 
There is nothing new about high taxes on the indian populace. In India, the GST rate may reach 28% for a variety of products, from basic necessities like pickles, ghee, and edible oils to more complex industries like electronics and autos. As a result, both the middle class and the impoverished bear a very heavy and frequently unbreakable load, while those who can afford luxury also benefit from tax cuts.
 
The tax system is broken and has to be fixed to better serve the needs of society as a whole as opposed to widening the gap every second. It is imperative that policymakers take cognizance of these issues and strive towards an improved system for the benefit of the indian populace at large.
 
 
 
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G GOWTHAM

25/09/2024 08:09 AM