How you end up paying 106% taxes for Hyundai Creta; Base Model- 7.5L ; Government Taxes- 8L
Why are cars becoming expensive for Salaried Middle Class ?
- Actual Price of the Creta Base Model- 7.5 Lakhs
- Total Taxes (Direct + Indirect Taxes) -8L
- You end up paying 106% taxes on Hyundai Creta’s Base model.
How Government is levying various taxes on Salaried Employees in India lets check out in detail.
Sales of Cars below 10L is decreasing
- As per the Maruti Suzuki chairman, Sales of the cars below 10 lakhs have been gradually decreasing
- The reason is that Indians are getting obsessed with the SUV car segment.
Hyundai Creta – 1/3 rd Market share in SUV car segment
- Hyundai is the 2nd largest car manufacturer in India with 15% market share.
- In SUV segment, Hyundai has captured more than 50% market share in India.
- Hyundai Creta has captured 33% market share in SUV car segment which means creta has captured 1/3 rd market share in SUV cars.
3 Different options for buying a Hyundai Creta
- When you Buy Creta with Full Payment – 13 Lakhs
- When you Buy Creta on Loan – 15 Lakhs
- Salaried Employee buys Creta on Loan – 18.2 Lakhs
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When you Buy Creta with Full Payment – 13 Lakhs
| Actual Car Price | 7.5 Lakhs | |
| a) | GST (28%) | 2.1 Lakhs |
| b) | Cess (17%) | 1.2 Lakhs |
| Ex Showroom Price | 11 Lakhs | |
| c) | RTO (Mumbai) (12%) | 1.3 Lakhs |
| d) | TCS @1% | 11 Thousand |
| Insurance | 58 Thousand | |
| On Road Price | 13 Lakhs | |
| a+b+c+d | Indirect Tax (a+b+c+d) | 4.8 Lakhs |
For a 13 lakhs Creta , you have to pay 4.8 Lakhs as Indirect taxes, means you end up paying 37% Indirect taxes on Total Price of the car.
2. When you Buy Creta on Loan – 15 Lakhs
- 80% people in India end up buying cars on loan.
- 8 of out every 10 people in India buys car on loan
| On Road Price | 13 Lakhs | |
| a) | Down-payment (20%) | 2.6 Lakhs |
| b) | Loan for 4 years @9.15% | 10.3 lakhs |
| Car EMI | 25 Thousand | |
| c) | Bank Interest | 2 Lakhs |
| a+b+c | Cost of Car | 15 Lakhs |
3. Salaried Employee buys Creta on Loan – 18.2 Lakhs
Now if you are buying Creta on Loan & if you are a salaried employee then this is the worst scenario.
- For buying creta on Loan, cost of car is 15 lakhs so considering 15 lakhs as in-hand salary.
- In order to get 15 lakhs as in-hand salary, you have to pay 3.2 lakhs as direct taxes
106% Taxes on Creta Base Model
This is how, Government is earning 8Lakhs behind every 7.5 lakhs Creta.
And this is main reason, cars are getting so expensive for salaried middle class in India due to the high tax burden. Though we are paying so much taxes in India but there is no significant return on investment from the government side.
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