How An 87 Lakh Rupee Porsche 911 Becomes 3 Crore+ In India: We Explain

Everyone knows that cars sold in India become expensive due to the excessive amounts of taxes which are levied on them by the Central and State governments. Now, recently, we have found out an interesting fact which, if you're a car enthusiast, will shock you. Now, this fact that we are talking about is that a Porsche which costs Rs 87 lakh in Canada costs a whopping Rs 3.13 crore once it lands in India and gets legally registered. Shocking, right? Well, we have the calculations to help you better understand these economics.

How does a Rs 87 lakh Porsche cost Rs 3.13 crore in India?

First off, let's start with the base price of a Porsche 911 Carrera. In Canada, this particular supercar, which is the entry-level 911, costs Rs 87 lakh. However, as soon as this supercar touches the Indian shore, it is slapped with a 125 percent Basic Customs Duty (BCD). So, when calculated, the 125 percent BCD of Rs 87 lakh comes to around Rs 1.08 crore.

Now, you may be wondering why the government charges this duty. Well, the answer is to “protect domestic manufacturers and control the outflow of foreign exchange.” The next big tax on your Porsche 911 Carrera (assuming that you are the lucky one who has got the chance to order one) is the CVD. For those who may not be aware, CVD stands for Countervailing Duty, which is 30 percent of the cost of the vehicle after it includes the basic customs duty.

This particular tax is levied to counterbalance the excise duty imposed on similar goods produced domestically. In the case of the 911, it comes out to around Rs 58.5 lakh. Then we move on to another 4 percent Additional CVD, which is another form of duty imposed over and above the regular CVD to equalize local taxes like VAT that local manufacturers pay. This additional CVD is Rs 10 lakh.

More taxes

Did you think that your 911 came home after you paid these taxes? Sorry to break it to you, but there are more taxes that need to be paid before you can sit in the driving seat of your superfast supercar. The next tax on your Porsche is a National Calamity Contingent Duty (NCCD), which is Rs 2.5 lakh or 1% of the cost. NCCD is a tax used to raise funds for relief and rehabilitation during natural disasters.

Now, although minor, it still adds up in such high-value transactions. Then there is the Education Cess of Rs 3.4 lakh, which is 2% of your vehicle's cost. This particular cess is charged on the total duties and not the base value, and it is “used to fund education initiatives in the country.” On top of this, there is an additional 1% Secondary and Higher Education Cess, which is Rs 1.7 lakh.

As if these cess charges were not already enough, there is an additional 0.13% tax, which includes miscellaneous cess included in import calculations, sometimes applied by state or central authorities. Now, you may be wondering—now, finally, you can drive your swanky Porsche, right? Well, not so fast, buddy. You also have to pay registration taxes!

Now, coming to the registration and road taxes for your Porsche 911 Carrera. You have to pay 15% of the final value, which is roughly Rs 2.7 crore at this point, to the state government in which you live. This should come out to around Rs 40–Rs 41 lakh depending on the state you live in. So, once you add up all the costs, the final cost of your brand-new Porsche 911 Carrera becomes Rs 3.13 crore.

Also, before you forget, you have to remember that in order to pay for this car, you must earn an income of Rs 4.9 crore pre-tax. Then you have to pay around 34 percent direct income tax, and only then you'll be able to afford this car. Yes, that was exhausting, we know. But hey, at least you are sitting inside your new Porsche.