Buying a car or just helping govt fill coffers? CA shares harsh middle-class reality of owing car in India

A LinkedIn post by CA Arvind C Thomas is gaining traction for revealing how buying a new car in India can come with nearly Rs 6 lakh in taxes, making what should be a middle-class purchase a significant financial burden.

Check full post here
Thinking of buying a car? Here’s a reality check.
It’s not just the car you’re paying for — you’re paying a mini fortune in taxes too.

I recently came across an invoice for a Hyundai Creta (top variant) and this is what caught my eye:

Actual cost of the car: ₹12.91 lakhs
Discount: ₹11,000
Taxable amount: ₹12.80 lakhs

Now here’s where it gets crazy,
GST (28%): ₹3.58 lakhs
Compensation Cess (17%): ₹2.17 lakhs
TCS (1%): ₹18,573

That’s nearly ₹6 lakhs in taxes — almost 46% of the car’s base price!

And no, this doesn’t include road tax, insurance, registration or fuel cost. That’s extra.

Honestly, this raises a question —
Are we buying a car or just helping the government fill its coffers?

With taxes this high, upgrading a vehicle feels more like a luxury than a necessity. The middle class keeps paying silently, and no one bats an eye.

Maybe it’s time we start talking about this?

How social media reacted?

“Not only that you, if you are self employed or running a business, no GST ITC is available, unless you are in the business of passenger transportation, driving school or selling cars. Therefore this tax is largely a stranded cost for everybody, in other words full revenue goes to Govt,” said one user in response to the post.

“Whooping amount goes in taxes. Really a point to think before taking decision to buy car,” said another user.

“Very bitter truth. No one talk about it,” said one more user in reply to the post by CA Thomas.

Source: The Economic Times