Compact car production at the Mercedes-Benz plant in Pune, India

Mercedes Benz India sold 13,231 vehicles in 2016 and this year from January to June, the company has notched sales of 7,171 units. While, the growth in India is promising, there are ongoing concerns over the proposed hike in cess on Goods and Services Tax on luxury cars from 15 per cent to 25 per cent. The cumulative taxes could be even higher and depends on individual state tariffs.

Luxury car makers like Mercedes-Benz which have invested heavily in production facilities in the country are in a wait-and-watch mode as the final impact is yet to be worked out.

“We do not understand suddenly why the need to actually review the cess all over again. We have so much to contribute. We have high ends jobs that we are able to create, willing to create,” said Mercedes Benz India Managing Director and CEO Roland Folger.
Folger added, “We need a little bit of support on the taxation side and we could significantly increase our output and also the manpower. We are waiting for the timing and also waiting for the size of the cess.”

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