New Cars to get Costlier in Maharashtra; Government to Propose 1% Safety Cess

Jan 01, 1970
New Cars to get Costlier in Maharashtra; Government to Propose 1% Safety Cess

The Union and the State budgets have not been so favorable for the vehicle buyers and adding more to their woes is the new proposal by the Maharashtra State government, wherein an additional 1% safety cess will be imposed on the sale of new cars in the state. This comes right after the Petrol Dealers' Association announces protest in Mumbai against the 'NO HELMET, NO PETROL' directive proposed by the state govt. So, the overall impact on the vehicle buyers and owners in the state will be a bit tensed. This step has been taken to create a certain Road Safety Fund that will be useful in curbing the road accidents throughout the state.

If the proposal gets accepted, the prospective new car buyers will have to shell out extra amount of something around Rs. 5,000 in case it's a compact sedan, whereas those who are planning to buy an SUV, they might have to end up paying an additional sum of Rs. 10,000 to Rs. 15,000. However, this nominal additional cess will move in a 6-digit figure if a person is buying a luxury car, where the cess might amount to Rs. 1-2 lakh.

safety Source:

According to a senior official from the Transport Ministry, "If the new cess is introduced during this assembly session, it will help raise Rs. 250 crore annually which can be used for road safety measures and to prevent fatalities."

Earlier this year when the finance minister, Arun Jaitley, announced the Union Budget 2016-17, he imposed an additional infra cess tax of 1% on the purchase of new CNG, LPG and petrol vehicles that fall in the sub-4-metre category and have 1200cc or below engine capacity whereas the diesel vehicles having engine capacity of below 1500cc and falling in sub-4-metre list will be charged with 2.5% of extra cess. On the other hand, the luxury vehicles costing above Rs. 10 lakh will face 4% additional cess, called 'high capacity tax' along with 1% luxury tax.

Among all the chaos going on in one of the major states of India, Maruti Suzuki too has announced a hike of up to Rs. 20,000 on its complete range of cars available in India. The reason behind this step is the impact of foreign exchange movement on the development of motor cars and hence to compensate it, the popular Indian brand has planned to increase the prices of its products.

Maruti Suzuki has witnessed a good sale in the month of July with nearly 1,37,116 units sold and this price hike will not affect the sales of Maruti adversely. As compared to the sales figures in July in the last fiscal year, the company has observed a growth of 12.7 per cent, which is worth appreciation.

maruti-baleno Source:https://

Where cars like WagonR, Alto, et al will witness a hike of Rs. 5,000; Baleno, Brezza and Vitara, on the other hand, will become costlier by Rs. 10,000 to 20,000. The revised prices will come into effect from the 1st of August 2016. The official statement released by Maruti Suzuki reads – "This price revision is based on factors like segment wise demand, forex movements and strategic objectives of the company."

With the price hike, the manufacturing cost of the cars is also like to go up as in the past months the prices of steel has take a steep hike of up to 36% whereas the rubber has taken an increase by more than 20% in its price. The increase in the prices of raw materials for cars is likely to affect the cost of the other car manufacturers too and we can soon expect them to make an official announcement regarding the price hike.

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