Importing a High-End Car from the UK to India: Costs and Considerations
Imagine you have found your dream car with a sticker price of 30 lakhs in the United Kingdom. Your desire extends beyond just owning the car; you wish to import it to India. How much would it cost you in total? To estimate the total cost, we need to factor in customs duties, taxes, and other fees.
Cost Estimation for Importing a Car
Let's walk through the process of calculating the total cost of importing a car from the UK to India. We'll start with a basic calculation and then consider additional practical concerns.
Basic Cost Calculation
Base Price of the Car: 30 lakhs (Rs. 3,000,000) Customs Duty: 100% of the car's value (Rs. 3,000,000) Goods and Services Tax (GST): 28% of the car's value plus customs duty (Rs. 1,680,000)The total cost, including customs duty and GST, would be:
Calculation
Customs Duty 3,000,000 × 100% 3,000,000
Total Cost with Duty 3,000,000 3,000,000 6,000,000
GST Calculation:
Grand Total including Customs Duty 6,000,000
28% GST 6,000,000 × 28% 1,680,000
Total Cost 6,000,000 1,680,000 7,680,000 (Rs. 76.8 lakhs)
Practical Considerations and Expert Advice
While the estimated cost is a useful starting point, there are several practical issues to consider:
Customs and Logistical Fees: The CIF (Cost, Insurance, and Freight) cost might be an additional 120% of the value. If the insurance and import cost are 3 lakhs, the tariff would be 120% on 6.3 lakhs, resulting in an inflated cost of 7.3 lakhs. This is often not worth the hassle. Service and Parts: Avoid sourcing parts and service from foreign distributors, as it will significantly impact the car's maintainability and resale value. Without quality mechanics and special tools, imported cars might become abandoned 'garage queens' or face tragic accidents. For example, a 1981 BMW 525i that faced no service and was left-hand drive from Switzerland was declared a write-off. Financial Considerations: Your 76.8 lakhs could earn you approximately 55,000 per month through other financial means, such as investing in property or gold. It's crucial to preserve and grow your capital wisely. Consider bringing one-kilogram gold bars or investing in a debt fund instead of buying a fancy car.According to expert advice, importing a car doesn't provide a good return on investment. In the Indian market, imported cars face numerous challenges including:
Quality Mechanics: The lack of skilled mechanics and specialized tools for imported cars makes maintenance a nightmare. Insurance and Service: Insurance premiums are higher, and finding a reliable service center can be difficult. Resale Value: Imported cars generally have low resale value due to limited parts availability and poor service networks.Conclusion and Advice
Importing a car from the UK to India is not a wise financial decision. The costs involved, such as customs duties, GST, and additional insurance and import fees, combined with the practical difficulties in maintaining and servicing imported cars, make it a less favorable option. Instead, consider investing in other financial instruments such as property, gold, or debt funds. This will provide you with a better return on your capital and reduce the risk associated with importing luxury vehicles.