Finance Minister Arun Jaitley presented the Union Budget 2016-17 where he presented new tax structures on different segment of vehicles. In this calendar year’s budget, Jaitley announced an infrastructure cess of up to 4% on passenger vehicles such as cars, SUVs and luxury cars. Moreover, luxury and small cars further had their own woes. According to the new budget, small vehicles would attract a cess of 1% while vehicles with higher engine displacement (read luxury cars and SUVs) will attract a cess of 4%. Apart from that, a cess of 2.5% is also proposed on diesel vehicles.
So how exactly would the new tax structure impact the manufacturer and finally you?
We calculated the estimated rise in the prices of vehicles from different segments based on the new tax structure and this is what you can expect to see in terms of expected price hike. Note: Figures considered are the ex-showroom Delhi prices of the top of the line variants:
| Make/Model | Expected Hike in INR |
| Hatchback | |
| Maruti Swift | INR 5,000-9,000 |
| Renault Kwid | INR 3,000-6,000 |
| Hyunida i20 | INR 5,000-15,000 |
| Volkswagen Polo | INR 5,000-15,000 |
| SUVs | |
| Mahindra XUV5OO | INR 40,000-50,000 |
| Tata Safari | INR 40,000-50,000 |
| Ford EcoSport | INR 35,000-50,000 |
| Renault SUV | INR 35,000-50,000 |
| Luxury cars | |
| Audi A8 | INR 4,50,000-6,00,000 |
| BMW 7-Series | INR 4,50,000-6,00,000 |
| Mercedes S-Class | INR 4,50,000-6,00,000 |
| Volvo S60 | INR 1,50,000-3,00,000 |
Those are the estimated price hikes that we expect the manufacturers to levy on their products. Mercedes-Benz India has already announced a price hike for its entire product range with new tags to vary by 3-5%. We expect the rest of the manufacturers to announce price hikes for their respective products in the coming days.