'You’re not buying a car, you’re buying taxes': Analyst unpacks why prices skyrocket in India
The breakdown: 28% GST, 22% compensation cess for large vehicles, 10% road tax, 18% GST on insurance, plus import duties, shipping, and registration fees.
- Jul 16, 2025,
- Updated Jul 16, 2025 12:52 PM IST
Tesla’s sleek new Model Y has just hit Indian roads — but it's not the ₹61 lakh price tag that’s shocking buyers. It’s the fact that more than half of that cost is pure tax.
Analyst Sanjay U took to LinkedIn to break down the staggering tax load turning Indian car dreams into fiscal nightmares. “Your real purchase is not the car, it’s the tax slip,” he wrote.
While the same Model Y sells for ₹32 lakh in the U.S., Indian buyers are shelling out nearly double — not for luxury upgrades, but for a complex web of taxes.
The breakdown: 28% GST, 22% compensation cess for large vehicles, 10% road tax, 18% GST on insurance, plus import duties, shipping, and registration fees.
“And wait,” Sanjay added, “be grateful that Tesla is an EV.” Had it been a petrol or diesel vehicle, buyers would face fuel taxes nearing 100%.
Indian infrastructure adds salt to the wound. “You pay road tax for roads that double up as rivers every monsoon,” he noted.
Despite the push for electric vehicles and cleaner transport, critics argue that the tax structure punishes aspiration. “In the end, you don’t just buy a car,” Sanjay wrote. “You buy layers and layers of taxes… and get to proudly drive India’s GDP on four wheels.”
His post ends with a stark reality check: “Dream of driving luxury? Congratulations. You’re just sponsoring luxury for the tax department.”
Tesla’s sleek new Model Y has just hit Indian roads — but it's not the ₹61 lakh price tag that’s shocking buyers. It’s the fact that more than half of that cost is pure tax.
Analyst Sanjay U took to LinkedIn to break down the staggering tax load turning Indian car dreams into fiscal nightmares. “Your real purchase is not the car, it’s the tax slip,” he wrote.
While the same Model Y sells for ₹32 lakh in the U.S., Indian buyers are shelling out nearly double — not for luxury upgrades, but for a complex web of taxes.
The breakdown: 28% GST, 22% compensation cess for large vehicles, 10% road tax, 18% GST on insurance, plus import duties, shipping, and registration fees.
“And wait,” Sanjay added, “be grateful that Tesla is an EV.” Had it been a petrol or diesel vehicle, buyers would face fuel taxes nearing 100%.
Indian infrastructure adds salt to the wound. “You pay road tax for roads that double up as rivers every monsoon,” he noted.
Despite the push for electric vehicles and cleaner transport, critics argue that the tax structure punishes aspiration. “In the end, you don’t just buy a car,” Sanjay wrote. “You buy layers and layers of taxes… and get to proudly drive India’s GDP on four wheels.”
His post ends with a stark reality check: “Dream of driving luxury? Congratulations. You’re just sponsoring luxury for the tax department.”