Santosh Iyer, MD & CEO of Mercedes India.Mercedes-Benz said that any changes in GST rates on electric vehicles will have an impact on investment and employment, while slowing down their sales. The comments come at a time when the GST Council is understood to be discussing raising GST rates on cars priced above Rs 40 lakh from existing subsidised tariff of 5%.
Santosh Iyer, MD & CEO of Mercedes India, said this would be a negative for the industry and discourage luxury players. “Any increase in tax will slow down the adoption of EVs,” Iyer told TOI.
On any changes for fully-built imports (CBUs), he said, “Fiscally, it doesn’t make sense because these EVs are imported with 110% duty. So, govt is getting a lot of duty from these cars. And if you increase the GST, the demand for these cars will surely come down and therefore from a revenue perspective, it will be neutral or even negative for govt.”
Also, he said that as the demand becomes healthy for the imported luxury cars due to lower duties, companies are encouraged to assemble them in India. He further added, “It doesn’t make any sense to even consider locally-produced EV cars (for a GST hike) because it has a direct impact on the investment, employment and everything else.”
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