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Old 19th May 2017, 10:59   #166
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Default Re: GST effect on car prices?

Quote:
Originally Posted by vsrivatsa View Post
In today's Times of India they are speculating that Car Prices would come down. Attached is a snip from today's paper showing examples for Swift Petrol and Honda City:

Attachment 1639906

Based on some of the recent reports, they were predicting a minimal increase in prices for small cars but it looks like there would be some price reductions here as well...
Now based on more clarity on GST if one were to calculate Honda City's price, it would be:

Price : 100
Freight : 5
Insurance : 2
GST : 43
-------------
Total : 150

Which is cheaper than 164 and a drop of 8.5-9% in Ex-showroom of Honda City.

~m
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Old 19th May 2017, 11:11   #167
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Default Re: GST effect on car prices?

Quote:
Originally Posted by serious_maniac View Post
Now based on more clarity on GST if one were to calculate Honda City's price, it would be:

Price : 100
Freight : 5
Insurance : 2
GST : 43
-------------
Total : 150

Which is cheaper than 164 and a drop of 8.5-9% in Ex-showroom of Honda City.

~m

Price : 100
Freight : 5
Insurance : 2
GST : 43
Roadtax: 10
-------------
Total : 160

Overall there is some cumulative effect as well (as Road tax I think is on final after tax amount)
Based on above assumption:-


Price : 100
GST : 43
-------------
Total : 143

Road Tax: 10
-------------
Total 157.3
Freight : 5
Insurance : 2
------------
Total 164.3

Some Chartered Accountant on the group may give us exact number.

PS: Excise duty will be 24% and Infra cess would be 1% on cars with >1200CC and <1500CC engine.
This link has details
http://www.mycarhelpline.com/index.p...=572&Itemid=10

Last edited by Muski : 19th May 2017 at 11:22.
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Old 19th May 2017, 11:21   #168
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Default Re: GST effect on car prices?

Quote:
Originally Posted by LionX View Post
Current taxation for luxury cars & SUV's are beyond 50% so GST will bring down the price even at the highest slab. 28+15 = 43 %
The 15% is not additional tax, but it is a Cess. ( Tax on Tax). Hence the calculation would not be

28+15 = 43 %
but
28 + 15% = 32.2%

( Cess means tax on tax, for a fixed time (may be till some target is reached) ).
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Old 19th May 2017, 11:26   #169
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Default Re: GST effect on car prices?

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Originally Posted by condor View Post
( Cess means tax on tax, for a fixed time (may be till some target is reached) ).
Not all cess are the same.

For example Swacha Bharat Cess or Krishi Kalyan Cess are calculated on taxable value. I can assure you automobile cess is going to be the same.
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Old 19th May 2017, 11:30   #170
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Default Re: GST effect on car prices?

I think everyone here is calculating cess on the price of the vehicle. Cess is tax on tax so 15% would be calculated on the 28% tax and not on the price of the car i.e. 15% of 28% of (price of the car).
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Old 19th May 2017, 11:54   #171
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Input Credit for Commercial Operations allowed under GST


Guys in transportation or services business can get Input credit. Wonder if it's possible to set up an independent company and buy all Cars/ SUV in that and then raise an invoice to the company we work for?

And Is it mandatory to get commercial Registration Number on such vehicles?
Attached Thumbnails
GST effect on car prices?-screen-shot-20170519-11.54.42-am.png  


Last edited by Turbanator : 19th May 2017 at 11:58.
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Old 19th May 2017, 13:29   #172
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Default Re: GST effect on car prices?

Can someone explain me that will GST neutralize the price difference found in different states ?

OTR price for many cars are definitely higher in the south as compared to northern states.
Some of it could be due to registration costs in states such as Karnataka, but will GST result in prices of these vehicle come down in states such as Karnataka ?
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Old 19th May 2017, 13:40   #173
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Default Re: GST effect on car prices?

Quote:
Originally Posted by rajshenoy View Post
Can someone explain me that will GST neutralize the price difference found in different states ?

OTR price for many cars are definitely higher in the south as compared to northern states.
Some of it could be due to registration costs in states such as Karnataka, but will GST result in prices of these vehicle come down in states such as Karnataka ?
My little knowledge of GST on car pricing
1. Road tax does not fall under GST, so higher Karnataka road taxes will continue post GST. This mean cars will be costlier in Karnataka even after GST rollout.
2. Ex-showroom prices are expected to be uniform across the country.

my two cents.

Last edited by hillsnrains : 19th May 2017 at 14:01.
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Old 19th May 2017, 15:17   #174
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Maruti Suzuki, Tata Motors among 22 companies adversely impacted by GST rates- but prospective customers will have to bear the brunt and pay more !

Small- car buyers have to shell out more under GST, SUV's to cost less.

GST effect on car prices?-capture.jpg
link


Maruti Suzuki's R C Bhragav - Maruti Suzuki sees no impact of new GST rates on small cars!

link1

Last edited by volkman10 : 19th May 2017 at 15:44.
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Old 19th May 2017, 15:31   #175
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Default Re: GST effect on car prices?

So, that's the end of sub-4m cars era. With tax difference of just 2% between cars of sub-4m and +4m length (and engine < 1200 / 1500cc), none will spend effort to develop cars of sub-4m category. And whoever has spend such huge amounts, will become fools. And we are going to see a lot of turbo/bi-turbo 1500CC Petrol / Diesel engines in the SUVs / luxury sedan segments, to effectively make it under mid-size ("non-luxury") category.

I am feeling sad about the small car manufacturers, as they are the major affected ones. Companies are spending anything around 600 - 900 crores to develop models which fit into some category. Then all of a sudden, government redefines the segment / tax bracket definitions that nullify all the benefits. Recent moves in the sub-4m, and hybrid vehicle definition are examples.

Last edited by romeomidhun : 19th May 2017 at 15:56.
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Old 19th May 2017, 15:39   #176
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Default Re: GST effect on car prices?

Quote:
Originally Posted by volkman10 View Post
Maruti Suzuki, Tata Motors among 22 companies adversely impacted by GST rates!

Small- car buyers have to shell out more under GST, SUV's to cost less.

Attachment 1640197
link
If I'm not wrong, small cars will actually cost marginally cheaper in some states (like Tamil Nadu). I think TN charges VAT as a tax on tax, and the current cumulative tax rate in TN for small cars is around 31%. That should result in a decrease of about 2.9% in the current ex showroom price for small petrol cars.
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Old 19th May 2017, 16:14   #177
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Default Re: GST effect on car prices?

Luxury cars or SUV's to gain most from GST!

Quote:
Under the present tax structure, small cars (less than 4 metre in length and petrol engine under 1,200 cc and diesel engine under 1,500 cc) are taxed at 12.5 % and with another 12.5% to 14.5% of VAT and levies, the total rate goes up to between 25% to 27.5%.
The new tax rate after the implementation of GST will push the total tax figure to more than 29%, resulting in an increase in prices of small cars. In the most price-sensitive segment in the country's automotive market, this increase could have a negative effect on the buying sentiment and thereby affect the manufacturers adversely.
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Quote:
Mid-segment cars such as the Honda City and the Hyundai Creta are likely to remain unaffected by the GST rates as these vehicles are already charged at around 43% of tax rate. The flat 28% tax and 15% of cess will bring the total to 43%, resulting in almost no change. However, if the cess on this segment of vehicles, we might witness a small reduction in prices
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Quote:
People looking to buy luxury cars or SUVs though have a reason to rejoice as GST might bring down the prices of such vehicles. Vehicles falling in this bracket are subjected to a heavy tax rate of around 55% in total. Post GST implementation, this rate will come down significantly to 43% (28% + 15%), resulting in a reduction of 12% in the tax rate. This means your next luxury car or SUV could soon become considerably cheaper.
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Concessions or rebates on hybrid and electric vehicles haven't been announced yet and announcement on the same is awaited from the Government.

FE

Last edited by volkman10 : 19th May 2017 at 16:25.
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Old 19th May 2017, 16:33   #178
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Default Re: GST effect on car prices?

A Comparison of Present taxes (ED and VAT) and impending GST is appended below:

GST effect on car prices?-gst.jpg

If the present VAT is 14.5% as is the case with Tamilnadu and Karnataka,
a) for sub 4 meter with engine upto 1200ccpetrol cars, the impact would be nil or miniscule. However, for sub 4 meter with engine upto 1500cc Diesel, the tax component after GST would increase by approx 2.2%

b) For mid segment cars the tax would increase by 1% whereas for large segment and SUV it would come down by 2.4% and 5.85% respectively.

So, it appears that SUV with GC>170mm and Engine capacity>1500cc would benefit the most form GST.

It is a pity that Hybrid cars will suffer the same tax as mid segment/Large cars.
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Old 19th May 2017, 16:41   #179
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Default Re: GST effect on car prices?

What would be the impact on spare parts prices due to GST? Which bracket would these fall into and what is the current tax rates on those? Overall, will there be an impact to the vehicle maintenance costs after GST?

Quote:
Originally Posted by DImPo View Post
A Comparison of Present taxes (ED and VAT) and impending GST is appended below:
Isn't the cess an addition to the GST amount rather than on the cost factory price? My understanding of this cess is that this will be similar to the current Krishi Kalyan cess which is added to the service tax as a percentage of the tax. Is my understanding wrong?

Last edited by y2ksrs : 19th May 2017 at 16:44. Reason: Multiple posts
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Old 19th May 2017, 17:03   #180
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Default Re: GST effect on car prices?

The >4m but <1500cc number (28%+3%) in that moneycontrol.com link is not backed up by any other source.

Actually, that category has become luxury category in GST 28%+15%. I see a computation at this link:
http://www.gstindia.com/suvs-luxury-...tation-of-gst/
Will the anti-profiteering clause ensure we get any benefit?

Before GST, it was clear that whatever ex-factory price might be does include excise, cess, etc. at that "tax event" ... dealer clearly charged us VAT at the next "tax event" when selling to us.

Under GST, wouldn't there still be 2 "tax events"? Factory adds 43% as part of ex-factory, dealer adds 43% of ex-factory+margin as part of ex-showroom (should show up in the bill). What would this amount be compared to pre-GST?
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