Why Uber’s sales tax hike was inevitable
The state of Kerala is about to have one of its largest sales tax increases in the country.
The state is set to hike the sales tax by 4.5% for new car purchases and 5% for all new and used vehicles by December 31.
The levy will apply to new car sales of up to Rs 10 lakh ($1,000) per vehicle.
This will apply on the same basis as for cars sold in Mumbai, Delhi and Bangalore.
The new levy is expected to bring in around Rs 1,600 crore ($2.2 billion) in revenue to the state’s coffers.
The new tax is being imposed on a roll-out basis, with an estimated one lakh new vehicles expected to be sold by the end of this financial year.
The introduction of the sales-tax hike is a major development in the state, which has been reeling from a series of auto disasters in recent years, including a fire at the state-owned car manufacturing facility at Gurgaon that killed more than 200 people and a truck crash at the city’s iconic Bandra airport that left four people dead.
The move was taken after an agreement was reached between the state government and Uber Technologies Pvt Ltd to set up a vehicle manufacturing plant in Kerala.
The company had announced that it would hire up to 15,000 workers from India for the manufacturing of the vehicle.
The company has also said it is willing to invest up to $100 million in Kerala and is also working towards setting up a manufacturing plant and other manufacturing operations in the State.