The Goods and Services Tax (GST), after getting passed in the Lok Sabha has now moved to a further upgraded level for becoming a reality. The new tax reform is expected to relieve the consumers from almost 17 indirect central and state tax levies, which will result in enhancing the ease of doing business. Furthermore, the overall customer demand is about to go through a rapid increment, as the benefits are directly to be passed on to them.
Effect of GST in Vehicle prices
After implementing GST, the effect of the multiplicity of various taxes will be reduced or we can say be removed. Currently, the VAT of 12.5-15 percent and standard excise duty of 12.5 percent along with cess, CST (Central Sales Tax) and entry taxes takes the tax rate up to 26-30 percent, which after applying GST will get a drop to 17-18 percent.
In the automobile sector, the medium-sized vehicles (12,00-15,00 cc) is expected to be the most beneficial, as they come with an estimated duty decline of almost 20 percent. On the other hand, the small-sized cars will get a price benefit of about 10 percent and talking about the luxury cars, they will get a benefit of about 5 percent. The two-wheeler segment will also get a benefit of 8-10 percent.
Change in Price structures
The implementation of GST will result in shrinking the price gap of both the compact sedan/hatchbacks and mid-size/full-size sedans. Apart from this, GST will allow all automobile manufacturers to have a uniform ex-showroom price of its vehicles across whole country.
For more information about the GST India, Get in touch with GST Helpline mobile app.
SAG Infotech has developed an informative mobile app for GST compatible with Android and iPhone, click on the download link below: