[sunny310c]

Kind of disappointed by what I am reading about GST and it's impact, especially on the Automobile sector. The cess rates have still not been announced so there is still hope but I am not holding my breath.

[RoadSurfer]

Car buyers from states like Karnataka & Maharashtra will se some benefit with 28% GST rate. But buyers from places like Delhi will see there costs increasing for buying a new car, so expect a car purchasing spree from these places in coming months.

[CarguyNish]

Originally Posted by RoadSurfer

Car buyers from states like Karnataka & Maharashtra will se some benefit with 28% GST rate. But buyers from places like Delhi will see there costs increasing for buying a new car, so expect a car purchasing spree from these places in coming months.

Is the Tax higher then 28% in these 2 States ?

If that's the case, expect some relief. Cars here are very costly. If they go up, it would be a Salt in the Wound. Most of buyers who are looking to upgrade to Entry Level Luxury Cars might have to pay more. Sad.

[Sree73]

Originally Posted by RoadSurfer

Car buyers from states like Karnataka & Maharashtra will se some benefit with 28% GST rate. But buyers from places like Delhi will see there costs increasing for buying a new car, so expect a car purchasing spree from these places in coming months.

Dear friend. Are you mentioning about the road tax? If yes, Road tax does not come under GST.

If you are mentioning about the excise duty, then it's not depending on the states. It's uniform across India

[SunilM]

Originally Posted by concorde24

FYI - Looks like the existing prices will be maintained post-GST as per article in ET. We will need to wait and watch till Nov 1st week for final rates.

http://economictimes.indiatimes.com/...w/54945445.cms

I believe that was the purpose of GST. It will be "revenue neutral" to start with for Government. In other words, most taxes will remain similar. Expecting a drastic drop or rise is just not practical. GoI will take a look at the revenues collected post GST rollout and tweak it accordingly in the next few years. That is when the real benefits may kick in, if revenues exceed their expectations, rates will gradually come down to more rational levels. After all government needs revenue to meet all its obligations and fiscal deficit targets.

[Patriot_Vishwas]

Originally Posted by Sree73

Dear friend. Are you mentioning about the road tax? If yes, Road tax does not come under GST.

If you are mentioning about the excise duty, then it's not depending on the states. It's uniform across India

The Economic Times 05 August, 2016

In a lucid term, the GST stands for one singular tax to be imposed on all goods and services in the country and will replace all forms of indirect taxes that we, as consumers, are paying for right now. In the light of the above development, industry now need to analyse the provisions of the draft law in detail, and assess its impact on their business. While there are issues of concern common across sectors, let us sought to identify the positive & challenges of the Model GST Law as may be relevant for the automobile sector.
Positives:
1. Vehicle prices - At present, the excise duty for vehicles is divided into four slabs, in which the smallest tax rate is applicable to small cars. With GST implementation, taxes levied by the centre like excise duty and state levels taxes like sales tax, road and registration tax would all be subsumed into one.

Assuming that the proposed tax rate of 18-20 percent is accepted, the vehicle prices are expected to decrease. The vehicle prices are expected to be more affordable and thus will create demand. Although it still remains to be seen if there would be a dual tax structure for small and big cars.

http://http://auto.economictimes.ind...-bill/53541153

[desdemona]

Originally Posted by SunilM

After all government needs revenue to meet all its obligations and fiscal deficit targets.

We are, in other words, going to be saddled with the worst, most-sub-optimal GST architecture, one that begs several points about the gst priciple in-the-first-place, and all while the REAL elephant in the room (i.e., the ridiculously low, even by 'third world ocuntry standards', DIRECT income, capital-gains, and especially wealth, inheritance and property taxes) is evaded/distracted away.

The middle class has-been/is being fed spiel about gst being some sort of collective/national policy-'GREAT good' whereas it is really only an exercize in bossting corporate profitability and some supply-chain/logistics etc efficiency in the medium-to-long-run. A very slow acting and very distant collective public good, since gst remains a REGRESSIVE tax, whereas DIRECT progressive tax reforms (where is the Direct Tax Bill, buried conveniently, is it not?) would yield immediate public/governmental/budgetary benefits, aside from greater fairness.

I'd happily pay much more in all manner of direct taxes, in exchange for fair and non-extortionate/distortionary indirect taxes on consumption. Why the hell does one have to pay 28-30%+ for a car? Or for eating at a restaurant? And that is, in the case of cars, in addition to the world-highest pretty-much tariffs on imported cars, too. Whose interests are being served with such a taxation structure, really, all told?

Demand-dampening irrational tax policy designed ABOVE ALL to get away from doing the essential: higher and with-a-much-wider-tax-base direct taxation on income, capital gains, wealth and property, etc on a progressive, simple-loophole-free and fair basis.

The PR interests (i.e., the corporates AND the media) have created an exultation about this (or any) gst being some sort of giant big-bang of a reform for the consuming public as-a-whole, which it most certainly is NOT, as we are discovering with this near-final absurd,chaotic, politically-risk-averse and self-defeating architecture/administration.

[Sree73]

Originally Posted by Patriot_Vishwas

The Economic Times 05 August, 2016

http://http://auto.economictimes.ind...-bill/53541153

Please go through.
http://www.gstindia.com/frequently-a...vices-tax-gst/

Also, for reference, please read the below.

http://www.mycarhelpline.com/index.p...1419&Itemid=10

Road tax is still under state level and it's not getting merged into GST.

[jetsetgo08]

Is there any info on the additional cess to be implemented by the states? If that cess is >1%, then we are at loss. Most would end up paying more for the new cars. Also, the term luxury car has not been defined. As most say, it is better to classify them according to value rather than technical specifications.

[Mad Max]

All these "reforms" and no one bats an eyelid on the leakage on the other end i.e. the intention of collecting taxes. It will be interesting to see what cess / tax comes on top of the GST. Either way, it's death by a million paper cuts. In the end, if we cannot reform the government services that utilize the money to provide for the citizens, it doesn't matter what taxes you collect in however fashionable form.

[Patriot_Vishwas]

Originally Posted by Sree73

Please go through.
http://www.gstindia.com/frequently-a...vices-tax-gst/

Also, for reference, please read the below.

http://www.mycarhelpline.com/index.p...1419&Itemid=10

Road tax is still under state level and it's not getting merged into GST.

Thanks!
Looks like we have to wait to get a better picture of GST.
I still stand by the ET article as it makes sense.
A uniform tax code for the country sans road tax is bit hard to digest.

Google also throws up another article on Autoportal which backs up the ET article.

[Sree73]

Originally Posted by Patriot_Vishwas

Thanks!
Looks like we have to wait to get a better picture of GST.
I still stand by the ET article as it makes sense.
A uniform tax code for the country sans road tax is bit hard to digest.

Google also throws up another article on Autoportal which backs up the ET article.

Not only Road tax. There are many things out of GST. Petroleum products, Alcohol etc. ET article may be making sense for us, the consumers . But that article is ill informed.

The current GST is highly diluted from the initial proposal. Instead of a single tax code, we are effectively having 6 different rates (5%, 12%, 18%, 28%) and a cess over and above the 28% for sin goods. Also, administratively 0% is also a tax rate. So, 6 tax rates in all together and making it much more complex. Over and above this the exclusion of items like Petroleum products, Alcohol and Road tax etc.

[tortoise]

I would agree with keeping road tax outside of GST. That tax is applicable when the intended end customer drives it out of showroom after purchase. No point paying tax for a car that never goes out of dealers yard

[gupta_chd]

Originally Posted by SunilM

That is when the real benefits may kick in, if revenues exceed their expectations, rates will gradually come down to more rational levels.

If you are indeed talking about India, it never happens. There will be some more schemes like NREGA, Loan waiver, more political expenditure, leakages, pilerage etc etc and it will be deficit again.

[loving_alaap]

Interesting read from NDTV auto article.

'Currently a clutch of indirect taxes (dominated by excise duty) see small cars (below 4 metres in length) taxed at about 30-32 per cent. The larger cars have an effective collective duty rate of about 48-54 per cent.

The Finance Minister Arun Jaitley has now announced that the GST rate for all passenger vehicles will be fixed at 28 per cent. But that implies a more or less status quo like situation for the smaller cars. And before you celebrate or make plans to buy that swanky larger car, consider this - all "luxury cars" will attract the 28 per cent slab when it comes to GST, but will have a further cess imposed on them to make good the potential loss of revenue on tax collections from such cars at present.

The FM has neither quantified nor defined this cess as of now - but has indicated that it will take all current cesses and special taxes into account. And yet he promises that it would like still keep the tax on luxury cars under 40%.

Further he has added that there may be a form of incentive worked out for the smaller, fuel efficient cars - to give them a further benefit to being included in the 28 per cent GST slab.'

Link: http://m.carandbike.com/news/gst-on-...l-cess-1621039