Ever wonder why a Tesla Model Y costs nearly double in India what it does in the U.S.? It’s not about luxury upgrades; it’s about taxes, taxes, and more taxes.
Sanjay U, an analyst, recently broke down the shocking reality on LinkedIn: “Your real purchase is not the car, it’s the tax slip.” While the same Model Y sells for ₹32 lakh ($38,300 USD) in the U.S., Indian buyers are shelling out ₹61 lakh ($73,000 USD). More than half of that price? Pure tax.
Here’s the breakdown of what you’re really paying for:
The Tax Tangle
- 28% GST (Goods and Services Tax): A hefty baseline tax.
- 22% Compensation Cess: An extra charge for larger vehicles, piling onto the GST.
- 10% Road Tax: For roads that, as Sanjay sarcastically noted, “double up as rivers every monsoon.”
- 18% GST on Insurance: Even your car insurance isn’t safe from the taxman.
- Plus, import duties, shipping, and registration fees: These add even more layers to the final price.
The “EV Advantage” (or lack thereof)
While you might think an electric vehicle like the Tesla would get a break, Sanjay points out, “be grateful that Tesla is an EV.” If it were a petrol or diesel car, you’d be looking at fuel taxes nearing 100%.
Driving GDP, Not Dreams
Critics argue this tax structure punishes aspiration. As Sanjay puts it, “In the end, you don’t just buy a car. You buy layers and layers of taxes… and get to proudly drive India’s GDP on four wheels.”
His stark conclusion? “Dream of driving luxury? Congratulations. You’re just sponsoring luxury for the tax department.”
This post highlights a significant barrier for car buyers in India, where the dream of owning a vehicle often turns into a lesson in public finance.