Taxes Breakup in Buying a Car including GST+ Road Tax + Taxes as Part of Car Ownership. Breakup Composition in Hatch, Sedan, Luxury Cars as Ownership Costs
Taxes in Buying New Car
Car Ownership is a matter of Joy and Pride for the Car Owner
But - other than it - is also a matter of Joy for Government - as they make Huge Revenue not only at time of Purchase but at Ownership too
Although we are in Post GST Regime and unlike Pre GST Scenario having multiple taxes
» Excise Duty
» VAT
» Infrastructure Cess
» CENVAT
» Entry Tax / Octroi / LBT
are all merged as part of GST - but as a Car Owner its Important to assess in how much Taxes do we pay
Prices of Some Models
» Toyota Fortuner - On Road is now 30 Lakh+
» Honda City Diesel - Price Range is from 10 Lakh to 14 Lakh
» Premium Diesel Hatchback - Polo and Elite I20 now cost 8 Lakh+
» No Car as of now is under 5 Lakh Price (On road) in Indian car market which has ABS and Dual Airbags as Safety Specs
To find out the Taxes
Apart from paying Tax on procuring parts from Vendors -
» Excise Duty is Component of Ex-factory Price
» VAT and Entry Taxes are Charged and is Component of Ex-showroom Price
» State Road Tax is charged and is component of On Road Price of Vehicle
Taxes at Time of Buying Car
| Component | Rate (including Cess) | Classification | Beneficiary |
| GST | 29% | Small Petrol Cars under 1.2 Litre engine | Central Government & State Government |
| 31% | Diesel Cars with Engine < 1.5 Litre | ||
| 43% | Cars with Engine > 1.5 Litre | ||
| Road Tax | 3% to 24% | Based on Vehicle Pricing - Differential in every State | State Transport Department |
Taxes as Part of Ownership (Post Purchase)
| Component | Rate |
| Taxes on Fuel | 45% to 55% |
| GST on Insurance Premium | 18% |
| GST on Labor Charges | 18% |
| GST on Spare Parts - Tyre, Battery, Spare Parts | 28% |
| Service Tax on Loan Foreclosure | 18% |
Rebates
Top of it for Salaried - there are no Income Tax Rebates or Deductions for Owning a car or Interest Payable on Car Loan , for Self Employed - yes if the vehicle used for business purpose - they can claim depreciation as non cash expense
DeMystify Prices of Cars - Based in Delhi
| Maruti Swift Vxi ABS | Honda City SV Diesel | Toyota Fortuner 4x4 | |
| Exshowroom | 5.72 Lakh | 10.68 Lakh | 28.2 Lakh |
| Insurance | 17K | 28K | 73K |
| Road Tax with MCD Parking Fees, Number Plate & Smart Card | 28K | 1.39 Lakh | 3.57 Lakh |
| On Road | 6.17 Lakh | 12.35 Lakh | 33.5 Lakh |
| Tax Component | |||
| GST (as Factory Price) | 1.12 Lakh | 2.8 Lakh | 6 Lakh |
| Road Tax | 28K | 1.39 Lakh | 3.57 Lakh |
| GST on Insurance Premium | 3K | 4000 | 11K |
| 1.43 Lakh | 4.23 Lakh | 9.68 Lakh | |
| On Road Price without Tax | 4.74 Lakh | 8.12 Lakh | 23.82 Lakh |
| Taxes Paid | 1.43 Lakh | 4.23 Lakh | 9.68 Lakh |
| Tax Proportion | 30% | 52% | 40% |
Fuel Taxes as Running Cost
| Kms Driven | Avg Mileage | Litre Used | Fuel Bill | Taxes Proportion |
| 70000 Kms Driven - Petrol Car | 14 Kmpl | 5000 Lit | 3.25 Lakh | 1.7 Lakh |
| 100000 Kms Driven - Diesel Car | 17 Kmpl | 6000 Lit | 3.25 Lakh | 1.45 Lakh |
Additional would be GST on Annual Maintenance in terms of GST on Spare Part Prices, Insurance Premium
With these High Taxes - it seems that Buying a Car is turning out to be a huge contribution to Government Ex-chequer in Development, Revenue of the Government
