GST effect on car prices in India; luxury car prices to go down, petite cars – Hybrid to become costlier, Find Fresh – Upcoming Cars, Latest Car – Bikes News, Car Reviews – Comparisons, Car – Bikes Movies and Photos

GST effect on car prices in India; luxury car prices to go down, puny cars & Hybrid to become costlier

Come tomorrow and the fresh Goods and Service Tax Bill (GST) will be in effect across the Indian sub-continent. The implementation of this fresh taxation scheme will help streamline the tax structure in our country. The GST will also have a direct effect on the prices of automobiles as well. Talking about cars in general, after GST each category of a four-wheeled vehicle will impart a twenty eight percent tax rate as standard. Not only this, depending upon which category the vehicle falls into, there will also be an extra cess. Before GST comes into effect, automobile manufacturers have already embarked providing the benefits to the end consumers in the form of phat discounts. There is a lot of confusion on as to which car is going to attract what tax under the fresh GST scheme and also which ones are to become cheaper while whose prices are to climb up. In order to solve the problem, here we bring you a segment wise break-up of how GSt is going to effect car prices in India. Also Read: GST effect on cars: Discounts up to INR one lakh on Mahindra XUV500, Maruti WagonR, Hyundai Grand i10 & others

“Despite of Automobile sector being one of the most promising contributor to economic growth, it has been facing the whip of enhanced tax rates and numerous cess for a substantial time now and even GST doesn’t seem to help much. The Industry doesn’t seem to relish the idea of levying the highest slab rate of 28% on all categories of vehicle regardless of the engine capacity or length. Likewise, parts and accessories for such automobile have also been placed in the same bracket of 28%.” said Gautam Khattar, Playmate – Indirect Tax, PwC. Also Read: GST effect on cars: Discount of INR 70,000 on Maruti Suzuki S-Cross; S-Cross facelift to launch in India by October 2017

Violating it down, due to the GST effect, Indirect tax incidence on two wheelers as well as puny cars which are less than four meters is to largely remain the same as present, with GST rate at twenty eight percent. However, there will be an extra cess of one percent for petite petrol cars (less than one thousand two hundred cc) and three percent for puny diesel cars (less than 1500cc) as well as high end motorcycles (less than 350cc) would apply. This could possibly see a minor effect on the sales of entry level petite cars and motorbikes. Also Read: GST influence on bikes: Honda two-wheelers to get cheaper from July 2017

Coming to large cars and SUVs, these are likely to benefit out of the GST scheme, as effectively the indirect tax is to be lower for this category. At the moment, vehicles in this category attract a tax of fifty percent, after GST the same will come down to forty three percent. This includes twenty eight percent of GST along with an extra cess of fifteen percent. Also Read: GST effect on bikes: Discounts on Bajaj V15, Detect, Pulsar upto INR 4500; Dominar four hundred price unchanged

Providing respite to the electrified vehicle category, the GST on this segment has been kept at the lower rate band of twelve percent. However, the manufacturers of such vehicles would face an inverted duty structure with major inputs liable to GST at either eighteen or twenty eight percent. However refund of excess input GST would be available, there could be significant working capital blockage for such sectors. Also Read: GST effect on cars: Maruti Suzuki Ciaz, Ertiga to get costlier by upto INR 1.Five lakh

What comes as a surprise however is that the Hybrid vehicles have been kept in the same cess bracket as that of luxury cars, which is of fifteen percent. This in addition to the twenty eight percent GST takes the total tax up to forty three percent. This could act as a dampener for OEMs proposing to invest in hybrid technology and adversely influence sale of such vehicles, unless a subsidy is separately given by the Government to offset such tax incidence.

While auto parts are proposed to be taxed at twenty eight percent GST. This could thrust up cost of after-sales service/ maintenance of vehicles, coupled with a possible increase in tax rate for services as well from fifteen percent to eighteen percent.

GST effect on car prices in India; luxury car prices to go down, petite cars – Hybrid to become costlier, Find Fresh – Upcoming Cars, Latest Car – Bikes News, Car Reviews – Comparisons, Car – Bikes Movies and Photos

GST effect on car prices in India; luxury car prices to go down, puny cars & Hybrid to become costlier

Come tomorrow and the fresh Goods and Service Tax Bill (GST) will be in effect across the Indian sub-continent. The implementation of this fresh taxation scheme will help streamline the tax structure in our country. The GST will also have a direct effect on the prices of automobiles as well. Talking about cars in general, after GST each category of a four-wheeled vehicle will impart a twenty eight percent tax rate as standard. Not only this, depending upon which category the vehicle falls into, there will also be an extra cess. Before GST comes into effect, automobile manufacturers have already began providing the benefits to the end consumers in the form of gigantic discounts. There is a lot of confusion on as to which car is going to attract what tax under the fresh GST scheme and also which ones are to become cheaper while whose prices are to climb up. In order to solve the problem, here we bring you a segment wise break-up of how GSt is going to effect car prices in India. Also Read: GST effect on cars: Discounts up to INR one lakh on Mahindra XUV500, Maruti WagonR, Hyundai Grand i10 & others

“Despite of Automobile sector being one of the most promising contributor to economic growth, it has been facing the whip of enlargened tax rates and numerous cess for a substantial time now and even GST doesn’t seem to help much. The Industry doesn’t seem to relish the idea of levying the highest slab rate of 28% on all categories of vehicle regardless of the engine capacity or length. Likewise, parts and accessories for such automobile have also been placed in the same bracket of 28%.” said Gautam Khattar, Fucking partner – Indirect Tax, PwC. Also Read: GST effect on cars: Discount of INR 70,000 on Maruti Suzuki S-Cross; S-Cross facelift to launch in India by October 2017

Cracking it down, due to the GST effect, Indirect tax incidence on two wheelers as well as petite cars which are less than four meters is to largely remain the same as present, with GST rate at twenty eight percent. However, there will be an extra cess of one percent for puny petrol cars (less than one thousand two hundred cc) and three percent for petite diesel cars (less than 1500cc) as well as high end motorcycles (less than 350cc) would apply. This could possibly see a minor effect on the sales of entry level puny cars and motorbikes. Also Read: GST influence on bikes: Honda two-wheelers to get cheaper from July 2017

Coming to large cars and SUVs, these are likely to benefit out of the GST scheme, as effectively the indirect tax is to be lower for this category. At the moment, vehicles in this category attract a tax of fifty percent, after GST the same will come down to forty three percent. This includes twenty eight percent of GST along with an extra cess of fifteen percent. Also Read: GST effect on bikes: Discounts on Bajaj V15, Detect, Pulsar upto INR 4500; Dominar four hundred price unchanged

Providing respite to the electrified vehicle category, the GST on this segment has been kept at the lower rate band of twelve percent. However, the manufacturers of such vehicles would face an inverted duty structure with major inputs liable to GST at either eighteen or twenty eight percent. Tho’ refund of excess input GST would be available, there could be significant working capital blockage for such sectors. Also Read: GST effect on cars: Maruti Suzuki Ciaz, Ertiga to get costlier by upto INR 1.Five lakh

What comes as a surprise however is that the Hybrid vehicles have been kept in the same cess bracket as that of luxury cars, which is of fifteen percent. This in addition to the twenty eight percent GST takes the total tax up to forty three percent. This could act as a dampener for OEMs proposing to invest in hybrid technology and adversely influence sale of such vehicles, unless a subsidy is separately given by the Government to offset such tax incidence.

While auto parts are proposed to be taxed at twenty eight percent GST. This could thrust up cost of after-sales service/ maintenance of vehicles, coupled with a possible increase in tax rate for services as well from fifteen percent to eighteen percent.

Related movie:

Leave a Reply

Your email address will not be published. Required fields are marked *