Taxed to the Tank: When Buying a Car Feels Like Funding a Flyover

Image Source: Business Today

News Summary: Chartered Accountant Arvind C Thomas' viral LinkedIn post has revealed the hidden tax cost in what otherwise looked like a humdrum car purchase. His ₹12.9 lakh invoice revealed that nearly ₹6 lakh—nearly 46 percent—went straight into taxes alone, highlighting the quiet cost pinch on India's middle segment.

Invoice Insights:

The base price of the vehicle: ₹12.91 lakh

After a marginal discount, the assessable value was ₹12.80 lakh

Taxing elements comprised:

28% GST: ₹3.58 lakh

17% Compensation Cess: ₹2.17 lakh

1% TCS (Tax Collected at Source): ₹18,573

Total tax expense: nearly ₹6 lakh

Excluded are road tax, registration, insurance, and fuel prices.

Public Reaction Highlights:

Thomas questioned whether the clients are purchasing a car or merely financing the exchequer.

He referred to it as a quiet middle-class burden, where car upgrades now constitute luxuries

The article has generated extensive online discussion about indirect taxation as well as affordability

Broader Consequences:

The decomposition highlights the way indirect taxes tend to greatly increase consumer expenses

It is causing problems of price transparency and tax rationalization needs

Middle-class consumers, usually not subsidy-eligible but taxed to the limit, are suffering

Sources: MSN News, Business Today, LinkedIn Post by CA Arvind C Thomas, The Economic Times