Tesla in India: CA Breaks Down How India’s 54% Car Tax is Crushing the Middle Class

A post by Chartered Accountant Himank Singla has gone viral and started a big conversation across India. In the post, he explained how buying a regular car can cost much more than expected because of very high taxes. His experience comes at a time when Tesla is planning to enter the Indian market, bringing even more attention to how expensive it is to own a car in the country.

CA Singla shared that he bought a Honda Elevate, the base price of the car was ten point six lakh rupees but the final on-road price became fifteen point eight lakh rupees after adding all the taxes. That means he paid an extra five point two lakh rupees, nearly fifty four percent more than the original cost, all because of taxes.

Why Are the Taxes So High?

Here is where the extra cost comes from:

• GST or Goods and Services Tax is charged at twenty eight percent, which is the highest rate
• An extra cess of around fifteen to seventeen percent is added depending on the car’s engine and fuel type
• States also charge a road tax, which can be ten to twelve percent
• On top of that, there are registration fees and insurance charges

All of these together raise the total tax to over fifty percent, even for a basic family car.

Tesla’s India Plans Show the Same Problem

The issue became bigger when people compared this with Tesla’s pricing. A Tesla Model 3 that costs around thirty lakh rupees outside India could cost up to sixty lakh rupees here. That is because India charges a one hundred percent import duty on foreign-made cars, along with other taxes.

The government wants companies like Tesla to make cars in India instead of importing them. Tesla is already in talks to build a factory in Gujarat. If that happens, the price of a Tesla might go down. But until then, buying such cars is almost impossible for the average Indian.

Is the Middle Class Paying Too Much?

CA Singla’s post has touched a nerve because many people feel that regular car buyers are being treated like they are buying luxury goods. Most middle-class families need a car for daily travel, work, and family needs, yet they are forced to pay very high taxes.

Some people on social media are also saying that these high taxes are being used to pay for government welfare schemes. Programs like Ladli Behna in Madhya Pradesh and Magalir Urimai in Tamil Nadu give monthly cash support to women and families. Together, such programs cost governments thousands of crores every year.

At the same time, the government collects over two point three trillion rupees from car and fuel taxes every year. Many believe that the small tax-paying middle class is carrying too much of the load.

What Can Be Done?

Experts suggest some changes:

• Lower the tax rate on basic vehicles to make them more affordable
• Support local car production to avoid high import taxes
• Use government funds more for building roads, hospitals, and schools instead of just giving cash payments

Whether it is a Honda or a Tesla, taxes are making cars harder to afford. Now people are asking, will the government take action or let this issue be forgotten?

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