If two Skodas land at nearly the same on road price but one has 22% lower GST, which one did the manufacturer spend more building?
There’s a car tax angle I haven’t seen discussed enough and I think it’s worth factoring into purchase decisions.
Here’s my thought: if a sub 4 metre car and an above 4 metre car from the same brand have a nearly identical on-road price, but the sub 4 metre car carries 22% less GST, doesn’t that imply the manufacturer has a higher pre tax cost built into the smaller car? And if the tax burden is lower, would the company have had more room or more incentive to invest in the smaller car’s engineering, materials, and features?
My specific dilemma:
I’m looking at two Skoda cars within a ₹14 lakh budget:
• Skoda Kylaq Signature Plus AT (sub 4): on-road ~₹14.20 lakh
• Skoda Kushaq Classic Plus 1.0 AT (facelift): on-road ~₹15.30 lakh (slightly over budget but under consideration)
Both cars share the same 1.0 TSI engine, the same MQB-A0-IN platform, and a very similar feature set. The Kylaq misses fog lamps, the Kushaq misses a reverse parking camera at this variant. The on road price difference is roughly 1 lakh.
Given that the Kylaq is taxed at a lower rate and still lands at nearly the same on-road price as the Kushaq, is it fair to conclude that Skoda has put more into building the Kylaq at this price point in terms of engineering investment per rupee compared to the Kushaq?
Would love to hear from anyone who understands automotive taxation and pricing strategy, or who has driven/owned either of these cars.