Post taxes people prefer Indian cars to third country ones

With the new vehicle tax coming in, many Bhutanese will opt to import vehicles from India rather than third countries as the tax difference is at 45-125 %.

The General Manager of Bhutan Hyundai Motors, Pema Loday, said, “Only few would be able to buy the cars from the third countries but many cannot. For personal use, they can afford only the Indian cars.”

He added for those in the tourism sector, the vehicles like H-1 bus and Santa Fe would be affordable in spite of the tax and cost of the car since they hire the vehicles to tourists and can raise the hire charges accordingly.

The cars imported from Korea like Hyundai Santa Fe would cost around Nu 2.9 mn to Nu 3 mn given the option of the car and exchange rate, while Tucson would cost about Nu 2.5 mn.

The cars imported from India, with the cylinder capacity of less than 1500CC, Santro Xing would cost about Nu 0.44mn. With the new taxation policy, Pema adds it will have an adverse effect since it is not a nominal increase.

The Sales Manager of Zimdra Automobiles, dealers of Maruti Suzuki cars below 1500cc said with the vehicle ban over the last two years the company has been affected and with the new tax it is definite that the company would have fewer buyers.

She shared that they are waiting for the government directives to start selling, as of now they are unable to make bookings although people come in for inquiries.

The company has discontinued the sale of Alto but Alto 800 would be available for sale with the starting price of Nu 0.4mn. The A-Star has been discontinued but in its place is the Maruti Celerio with the starting price of Nu 0.49mn. The Maruti Omni would cost Nu 0.4mn plus and WagonR about Nu 0.5 mn plus.

The General Manager of STCBL, Chador Wangdi, said with the tax revision there has been an impact on the light vehicles and no impact on the heavy vehicles sales.

The STCBL deals with Toyota cars imported from Japan and Tata and Eicher from India. The Toyota Prado would cost about Nu 5mn to Nu 6.9mn. While Toyota’s hybrid cars would cost between Nu 1.5mn to Nu 2.5mn. The Toyota Yaris would cost from Nu1.3mn to Nu 1.7mn.

With the new vehicle taxation, the vehicle cylinder capacity at or below 1500cc imported from India would impose a tax of 55% (45% sales tax and 10% green tax).

Vehicles imported from third countries having cylinder capacity at or below 1500cc, would be imposed a 100% tax(45 % sales tax, 45% customs duty and 10% green tax).

And vehicles with the cylinder capacity of range between 1500cc to 1799cc would be imposed 115% tax ( 50% sales tax, 50% customs duty and 15% green tax). For vehicles with 1799cc-2500cc, the tax imposed will be 120%, 2500cc to 3000cc at 125% and over 3000cc a tax of 180%. While the hybrid cars would also be imposed a tax of 45%.

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