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GST on Cars set to Reduce after Slowdown. In Consideration by GST Council as per Finance Minister

GST on Cars set to Reduce after Slowdown. In Consideration by GST Council as per Finance Minister

Amid slowdown in Passenger Car Section, GST on Cars in consideration for a Cut so as to make Car Prices Reasonable. GST Cut can bring down Prices by upto Rs 1 Lakh on Mid Segment

 

GST Cut on Passenger Cars

Its been worst Phase of Automobile Sector in Indian Passenger Car Market

  • Sales on Declining Trend with over 30% Fall in Car Sales with some OEM like Tata Motors reported in 60% Drop 
  • Job Cuts, Production Curtailed with a Direct Impact on GDP of India
  • Automobile Vendors as OEM Part Suppliers, Dealers Showroom are impacted with Profitability been hit due to low sales

Amid slowdown in Automobile Sector where Passenger Car Sales now as per report published in Economic Times - Finance Minister N Sitharaman given her recommendation to GST Council to consider a GST Duty Cut on Passenger Car Sector.

Important to note that on 23rd August 2019, Finance Minister announced for

  • Higher Depreciation @ 30% to be claimed in Income tax on Buying Cars
  • Deferred Registration Fees Hike on Buying Car
  • Assured that BS4 Cars would be allowed to be driven for entire tenure as per Registration Certificate

But seems it has not helped much and Automobile Sector is in deep Red been feedback given by dealerships that inquiries are very low for buying cars.

This has now led to consideration for reducing GST rates on Cars so as to boost demand

 

GST Rates on Cars & Expected Reduction

GST Cess Hike on Mid Segment, SUV, Luxury Cars. Price Hike due to Revised GST Cess

Below are GST Rates on Passenger Cars in India as of now applicable on Passenger Cars

Segment GST Rates
Sub 4 Meter Petrol Cars with Engine < 1.2 Litre 28% + 1% Cess = 29%
Sub 4 Meter Diesel Cars with Engine < 1.5 Litre 28% + 3% Cess = 31%
Cars with Engine > 1 Litre but less than 1.5 Litre 28% + 17% Cess = 45%
Cars with Engine > 1.5 Litre  28% + 20% Cess = 48%
SUV Segment (Cars above > 4 meter with > 170 mm GC) 28% + 22% Cess = 50%

Now are in talks where either

  • GST Rates can be slashed from 28% to 18%

or

  • Cess can be reduced by 50% which can Benefit in Mid Segment Cars to a greater extent

New Cars

Check Prices with Complete Features

Make
Model

Whatever measure it may be - it certainly going to bring back enthusiasm as Car Prices would certainly come down to a greater extent. To give Instance, if GST Rates Slashed to 18% in September 2019 then Prices of Cars can be reduced to below extent

  • Hatchback Cars - Prices will come down from Rs 25,000 (Alto) to upto Rs 70000 on Honda Jazz, Hyundai Elite I20
  • Compact Sedan Cars - Prices will come down from Rs 40,000 (Tigor) to upto Rs 80,000 on Maruti Dzire Diesel AMT
  • Compact SUV Segment - Prices can come down by upto Rs 1 Lakh
  • Mid SUV Segment - Prices can come down by upto Rs 1.5 Lakh
  • Range like Fortuner, Endeavour, Skoda Superb - Prices can come down by upto Rs 2.5 Lakh
  • Luxury Cars (30 Lakh to 1 Crore) - Prices can come down from rs 2.5 Lakh to Rs 7 Lakh

As per Report - the Minsitry has given recommendation to GST Council and is under consideration to take the Final Call. There is no official confirmation of specific dates mentioned by which GST rates can be cut but expect the final news on it to be announced in next 1 to 2 weeks in India

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Important: If you seek advise or recommendation, pls raise query in Car Forum instead of posting in comments

 

Comments 1

Guest - Surya on Wednesday, 04 September 2019 22:51

What about Isuzu, I am looking for Isuzu mux 4×4.. is there any offers going on, please suggest if it's worth the buy. And does bs6 fuel will effect bs4 diesel engines.?

What about Isuzu, I am looking for Isuzu mux 4×4.. is there any offers going on, please suggest if it's worth the buy. And does bs6 fuel will effect bs4 diesel engines.?
Guest
Wednesday, 18 September 2019

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