[vsun]

Originally Posted by Oxy

I think booking the vehicle now should not be a problem.

Technically Yes. But, If I book the vehicle now, the dealer may start pressurizing me to take delivery of the vehicle (I already got a confirmation from the dealer that the variant I opted is readily available in his stock yard).
Also, I am in no hurry since I have not yet sold my old vehicle (Mahindra Scorpio).

[Shivjeet]

Hey guys, can anyone please tell me what the effect of GST will be on CBU cars? I'm really worried as I have something on order.

[Turbanator]

Originally Posted by Shivjeet

Hey guys, can anyone please tell me what the effect of GST will be on CBU cars? I'm really worried as I have something on order.

Hi,
I will try, under present scenario Car CBU are taxed with 125% Basic custom Duty plus 1% Landing charges plus 30% CVD and some additional cess of 3 and 4%.Thereafter Manufacturers invoices to Dealer on 2% CST and at time of invoice dealer charges VAT which vary from state to state at present. So for an example a car with a FOB value of $ 100000 present costs with no margins of manufacturer or dealer - just taxes will be 1,80 Cr INR including VAT

Under GST regime apart from basic custom duty of 125% rest everything including VAT will be changed to GST and rate for this is fixed at 43%. So the same car with $ 100000 will first be taxed with 125% duties plus 43% so the costs will be 2,07 Cr

This is due to GST being charged on complete value i.e basic rates plus 125% customs unlike present sceneario where CVD gets charged only on basic rates. This is as per my understanding and I may be wrong so do clear this with your local dealer. They must have a clarity by now. Do update here as if this is correct then we can expect CBU to get even more expensive.

[Swapnil4585]

I am attending a seminar on GST, meant wholly, exclusively and only for auto-makers (all kinds of vehicles) and spare parts manufacturers / vendors, which is going to be conducted tomorrow in Aurangabad (Maharashtra).

The questions all of them and all of us have, are going to be discussed and explained in detail, and we expect to get a more clear picture of the impact of this fuel named GST on that combustion chamber. Stay tuned.

[sgiitk]

Originally Posted by vsun

Technically Yes. But, If I book the vehicle now, the dealer may start pressurizing me to take delivery of the vehicle (I already got a confirmation from the dealer that the variant I opted is readily available in his stock yard).
Also, I am in no hurry since I have not yet sold my old vehicle (Mahindra Scorpio).

This sort of a thing happens when the taxation undergoes a change. in this case it is a massive change, so all the more.

[harshunlimited]

Calling the attention of business owners who purchase their cars in the company's name to take the benefit of depreciation & claim interest on loan as expense.

What would be the treatment of GST if you sell your current car?

In the current scenario, irrespective of the entity of the purchaser (individual/dealer/corporate), we just quote an all inclusive sum, say 1lakh.

In Delhi, VAT being 12.5%, we deposit this tax of approx. Rs.11,000/- with the relevant authorities.

So, after 1st July, for a large car like corolla or civic with engine > 1500cc, would this mean, we ll have to deposit 43% tax to the authorities, to almost like Rs.30,000/lakh?

Does it make sense to sell your car right now before 1st July if you're looking to sell it in a few months this year?

[Turbanator]

What would be the treatment of GST if you sell your current car?

I don't think GST on the sales of old cars has been fixed at 43 % or if at all there is any notification on this.

The questions all of them and all of us have

Perhaps Swapnil can make note of this as well on implication on CBU's.

[Porcupine]

Originally Posted by Turbanator

Hi,
I will try, under present scenario Car CBU are taxed with 125% Basic custom Duty plus 1% Landing charges plus 30% CVD and some additional cess of 3 and 4%.Thereafter Manufacturers invoices to Dealer on 2% CST and at time of invoice dealer charges VAT which vary from state to state at present. So for an example a car with a FOB value of $ 100000 present costs with no margins of manufacturer or dealer - just taxes will be 1,80 Cr INR including VAT

Under GST regime apart from basic custom duty of 125% rest everything including VAT will be changed to GST and rate for this is fixed at 43%. So the same car with $ 100000 will first be taxed with 125% duties plus 43% so the costs will be 2,07 Cr

This is due to GST being charged on complete value i.e basic rates plus 125% customs unlike present sceneario where CVD gets charged only on basic rates. This is as per my understanding and I may be wrong so do clear this with your local dealer. They must have a clarity by now. Do update here as if this is correct then we can expect CBU to get even more expensive.

According to that the costs other than import duty come to a total of 38%. So with GST at 43%, the total increase would be 5%, yes?

[Revy]

Originally Posted by sgiitk

This sort of a thing happens when the taxation undergoes a change. in this case it is a massive change, so all the more.

In my case, it is the other way. I booked a Honda City on 15 Apr and expected delivery was supposed to be by 15 June. Now SA says it will get pushed to July ! Would that be a blessing in disguise for me as I will get some benefits of GST, post July 1 ?

Honda recently hiked ex-showroom price and the model I chose, crossed 10 lakhs. In Bangalore, that makes a big impact as the road tax increases from 14% to 17%. I would be more than happy to wait, if the ex-showroom price falls below 10 lakhs due to benefit of GST. (Current price is 10.13 lakhs). But there is no clarity..Nobody is able to give an answer. And Honda can choose not to pass any benefit to customers and enhance their profit margin. I am almost sure that Honda will choose not to offer any benefit to customers

[DImPo]

Originally Posted by Oxy

Also, how is the GST going to impact small sedans like the recently launched Maruti Dzire?

The compact sedans like Dzire / Ameo / Aspire / Tigor / Amaze which are all sub 4 meter length with engine capacity not exceeding 1200cc(Petrol) / 1500cc(Diesel) would generally see a nominal reduction in tax by approx 2% after introduction of GST.

[Shivjeet]

Originally Posted by Turbanator

Hi,
This is as per my understanding and I may be wrong so do clear this with your local dealer. They must have a clarity by now. Do update here as if this is correct then we can expect CBU to get even more expensive.

Thanks for your reply. I had a word with my dealer principal today, and was informed that I'll actually be paying .89 % less, so I have nothing to worry about now thankfully. Hoping for better clarity on this over time.

[vsun]

Originally Posted by Revy

But there is no clarity..Nobody is able to give an answer. And Honda can choose not to pass any benefit to customers and enhance their profit margin. I am almost sure that Honda will choose not to offer any benefit to customers

Actually some news is coming that the cost of Honda City may be increased after GST.

Link to the news https://gaadiwaadi.com/gst-impact-ho...margin-894784/

Don't know how far it is true.

[PetrolRider]

Originally Posted by Revy

But there is no clarity..Nobody is able to give an answer. And Honda can choose not to pass any benefit to customers and enhance their profit margin. I am almost sure that Honda will choose not to offer any benefit to customers

I read in some news report that there is a 'anti-profiteering measure' in GST, which directs the seller to pass on any input tax benefit to end user. I am not sure how it will work, GST gurus can help here.

Originally Posted by vsun

Actually some news is coming that the cost of Honda City may be increased after GST.

Link to the news https://gaadiwaadi.com/gst-impact-ho...margin-894784/

Don't know how far it is true.

I couldn't find how the price will be increased in the article, am I missing something? They have just put a statement that it would be more, but didn't say how.

[vsun]

Originally Posted by PetrolRider

I couldn't find how the price will be increased in the article, am I missing something? They have just put a statement that it would be more, but didn't say how.

Yes you are right. I too didn't found any supporting logic (The present tax structure on Honda City) mentioned, to support the statement that the price would be more.

Found the explanation for the prediction of price increase of Honda City in this article : http://www.outlookindia.com/website/...n-india/299014. But, this article is talking about the change in price of Honda City VMT Petrol in New Delhi only.

[Nohonking]

The effect of GST has already started to show up:

I happened to visit Ford dealership today to check out the new Endeavour. Since this segment (ex-showroom: 25.5L / OTR: 29.91L) is expected to have lowered taxation under GST regime, so the dealership is offering an outright discount of 50K till 30th June.

Similarly, Mercedes dealership is offering discount as much as 3L as of today.

These discounts clearly show, the prospective buyers are holding back and waiting for GST for a better price while for dealerships it is important to ensure stock regularly keeps moving out of their stock yards. Certainly, these dealerships aren't really happy with GST coming in, atleast today.

Thanks,
Simmi