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GST Impact on Car Prices - Positive - Postpone Car Purchase

Car prices are likely to get slashed post GST implemetation and with VII pay commission arrears getting credited we are likely to see an increase in sale of cars. However; this GST is going to act as a stumbling block as people are going to postpone their purchases till the bill is passed. Sectors likely to be benefitted with GST and sectors likely to witness  downtrend due to GST are given here. Maruti is going to be biggest beneficiary post VII pay commission arrears as excess cash in commom man pocket will drive him to Maruti as generally first car of a common man is Maruti.

However; as a consumer it makes sense to postpone the purchase till the passage of GST bill as it can bring lot of benefit for the end user in form of price reduction. Have a look at below image and see that how car prices are going to be impacted.

Current tax burden for carmakers:

  • Excise duty of 12.5-30 per cent that goes to the central exchequer.
  • VAT or Value Added Tax of 12-14.5 per cent that goes to the state government.
  • Cess 1-4 per cent.

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