Luxury carmaker Audi India said the industry would stage a come back only when there is rationalisation of taxes and the Budget this year did not give any positive signs for the sector.

Though the company is not affected much by the Budget, for the overall luxury car segment it was not a positive one. The government has increased the import duties on certain components, including those used in the electric vehicles (EVs).

“Duties which are applicable on the cars that we will bring in have 100 per cent import tax, so this duty structure will not impact us positively or negatively,” Balbir Singh Dhillon, Head of Audi India, told BusinessLine adding that the e-Tron EV, which the company will launch later this year, will also not be affected.

“What they (the government) are talking about is an increase from 25 to 30 per cent on completely knocked-down units (CKD) or semi-knocked down (SKD), but ours is a fully imported product and that comes into the category where the duties are already too high,” he said.

He said the luxury car industry is critical on the subject because this sector contributes only 1.2 per cent to the overall industry, which is nothing compared to the developed markets.

There is 22 per cent cess on luxury cars and a GST of 28 per cent, which are keeping the sector from growing. There is, on an average, a 15 per cent registration tax too, he said.

“So, first you pay import duties (100 per cent) then you pay GST which is 48 per cent and then you have registration tax of another 15 per cent. So, it’s duties on duties on duties — a multiple layers of duties which is keeping this sector very niche,” he said. That is why for the last five-six years, the luxury car market is stuck in the range of 30,000-40,000 units a year, he said.

Meanwhile, the company launched the all-new A8 luxury sedan with a starting price of ₹1.56 crore (ex-showroom), in BS-VI petrol engine, just like the Q8 and the new A6.

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