On the sale of every Toyota Fortuner, the government earns Rs 18 lakh and the company only 40 thousand, understand why?

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On the sale of every Toyota Fortuner, the government earns Rs 18 lakh and the company only 40 thousand, understand why?

New Delhi. One by one luxury cars are available to buy in the Indian market. Their cost is in crores. However, not everyone can afford these expensive vehicles. But a question must have come in your mind at some point of time that companies earn a lot of profit by selling expensive vehicles. But it is not so true.

If we assume that the Toyota Fortuner SUV is available in the market in the price range of Rs 31 lakh to Rs 48 lakh (ex-showroom, Delhi). Whenever a Toyota Fortuner is sold, the manufacturer earns a total of Rs 35,000-40,000 and the dealer earns around Rs 1 lakh. When it comes to the government, Toyota earns around Rs 18 lakh as all kinds of taxes on one sale of a Fortuner.

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understand the full calculation
According to YouTuber and CA Sahil Jain, the ex-showroom price of Toyota Fortuner is Rs 39,28,000. Out of this, the actual cost of the car is Rs 26,27,000, while the balance amount gets added on account of two components of GST namely GST Compensation Cess which is 22 per cent and GST is 28 per cent.

highest earning of government
Other charges are then levied on the total cost of the Toyota Fortuner. These charges are for registration, logistics, FASTag, green cess (for diesel vehicles), TCS, insurance and extended warranty. The government only gets the money collected from the registration fee and green cess. Therefore, adding up all the taxes and duties, the total earning of the government comes to a little over Rs 18 lakh.

lowest earning auto companies
Talking about the breakdown for the dealer, the earning on a sale depends on the commission earned on the ex-showroom price of the car, which includes only the actual price plus the GST component. They also earn commission on insurance, sale of goods and finance. Taking all the calculations into account, the dealer earns around Rs 1 lakh after selling the Fortuner. Car makers earn the least, as they get only a part of the actual cost of the vehicle which is close to the profit of Rs 40,000 on a car.

Tags: auto news, Autofocus, Car Bike News, Tax, Toyota Motors

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