THE GST EFFECT :
KEY HIGHLIGHTS :
1. GST rate of 28% decided on automobiles
2.Small,luxury cars to attract additional cess
3.Bikes over 350 cc to have additional cess
The GST council on its 14th meeting has finalised the GST across all categories of goods including automobiles. In addition to the base rate the government has also proposed to levy a cess of 1% & 3% on small cars with petrol and diesel engines respectively.
The base GST rates for the automobile segment has been set at 28% which is broadly in line with overall indirect tax rates at present.
"The rates are as per the expectations of the industry and almost all segments of the industry have benefited by way of a reduced tax burden in varying degree. This will pave the way for stimulating demand and strengthening the automotive market in the country.
Subrata Ray ,Senior Group Vice President - IRCA Limited ,said, "the prices of relatively price sensitive small cars may increase marginally post GST , while OEMs would pass on the benefit of lower taxes on SUVs and Bigger vehicles to customers. "
Small Cars could take a hit as the GST Council has decided to levy an additional cess of 1% on small petrol cars and 3% on small diesel cars, apart from the 28% GST rate.
Also, the Luxury cars will get more costlier as they face an additional 15% cess besides the 28% GST.
In addition, the 350cc will be seen as luxury goods and will see a new cess of 3%.
This is expected to have a big impact on the automobile industry and could result in price hikes!!
- TEAM TURBOCHARGED INDIA
