EU cars to be cheaper
Imports from Europe could face reduced duty of 30 percent instead of the current rate of 100 percent
Here’s some bit of good news in the middle of the week. Chances are that imported cars from Europe could become cheaper by a substantial margin, but not before 2017.
The European Union has been asking the Indian government for a while now to bring into complete effect the Broad-based Trade & Investment Agreement with the European Union. Under this agreement cars imported from the EU will be taxed at 30 percent rather than the current 100 percent rate of their price. This means that fully imported units from the German marques like BMW, Audi and Mercedes could instantly see a substantial drop in prices by around 20-30 percent of their on-road prices as soon as this treaty comes into effect. But remember, this is only for completely built-up units (CBUs) and not cars which have some amount of localisation. So expect only the top-end cars that cost upwards of Rs 60 lakh to benefit from this.
The EU negotiators want the rate to be scaled further down to 20 percent but the Indian government isn’t so keen on that. Also, the government is not in favour of applying these new rates before 2022 but it is believed that it will do so by 2017 due to keen persuasion by the EU. Looks like some good times ahead for luxury car buyers. Let's keep our fingers crossed and hope there is no slip between the cup and the lips.