Toyota Kirloskar Motor on Wednesday hiked prices of its popular SUVs and sedans such as Innova, Fotuner, Etios, Corolla. The price hike comes two days after government notified the hike in Goods and Service Tax (GST) cess on mid-size sedans and SUVs.
After the hike, Japanese carmaker's popular model Innova Crysta will be dearer by Rs 78,000. Toyota Fortuner, on the other hand, will now cost Rs 1.6 lakh more.
Toyota's sedan Corolla Altis will become dearer by up to Rs 72,000 and Etios Platinum by around Rs 13,000.
The decision to hike the prices has been prompted by the rise in cess from 2-7 per cent across mid-size to large size cars and SUVs by the GST Council, TKM said in a statement.
"Following the ordinance on GST amendment, we have to revise the price of our products in line with the cess hike which may nearly reflect the prices in the pre-GST scenario," TKM Director and Senior VP Marketing and Sales N Raja said.
Price of hybrids and small cars remains unaffected post the cess hike, he added.
Last week, the GST Council had voted for a multiple tax structure allaying fears of a flat 10 per cent hike in GST cess which was approved by the Cabinet.
The cess on mid-sized cars such as Hyundai Verna, Honda City, Volkswagen Vento, Maruti Ciaz, Toyota Corolla has been hiked by 2 per cent, taking the effective GST rate to 45 per cent. The cess hike on mid-size sedans has taken the tax incidence to a pre-GST level.
Cess on SUVs has been increased by 7 per cent taking the tax incidence to 50 per cent. SUVs also attracted a 15 per cent cess earlier.
Hyundai Motor India (HMIL) on Tuesday hit out at the frequent changes in tax rates on automobiles saying investment for new products and technology will be adversely impacted in the absence of consistent and long term policy.
"Implementation of GST was to create single unified large market with simplified tax structure for auto industry. However, the recent rolling back to multiple rates with pre GST classification has come as a set back to industry, shaking the confidence of auto manufacturers," HMIL said in a statement.
The company, which is the second largest car manufacturer in the country after Maruti Suzuki India, expects the decision to hike cess will impact sales during the festive season. "We expect the coming festive season will witness low customer sentiment on new purchase decision," it said.
(with PTI inputs)