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Old 19th May 2017, 17:03   #181
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Default Re: GST effect on car prices?

Here's the complete picture:

GST effect on car prices?-bloombergquint_gst-tax-rate-structure.png

RC Bhargava, Chairman, Maruti Suzuki India Ltd.:

Quote:
"We canít understand why the government is discouraging hybrids. It is almost like saying donít buy hybrids. There will be no point in making hybrids if they are taxed as muchÖwe will stop making them.
The rates for most categories have been kept the sameÖthere is going to be no change in the prices of those vehicles."
Abdul Majeed, Partner (Assurance), PwC India:

Quote:
"Talking about lack of infrastructure (to support electric vehicles), things will never happen; we will have to take the big leap, seeing the levels of pollution."
Vinod Dasari, president of the Society of Indian Automobile Manufacturers:

Quote:
ďThe government had informed the industry that the tax levels post GST will be similar to the existing taxes, and that there would be no significant changes.Ē
Bloomberg Quint


Quote:
Originally Posted by y2ksrs View Post
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?
Could be grouped under Industrial intermediate items, which is at 18%.
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Old 19th May 2017, 18:28   #182
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Default Re: GST effect on car prices?

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There will be no point in making hybrids if they are taxed as much…we will stop making them.
Quote:
RC Bhargava, Chairman, Maruti Suzuki India Ltd
I think the way Maruti & Mahindra project their Diesel/ Petrol cars as hybrid better they stop making. Apart from some start/stop / regenerative charging what is different in so termed Hybrids is unknown to me.

But Yes, Government should have come with something better for true hybrids, say with 5 % GST.

Last edited by Turbanator : 19th May 2017 at 18:30.
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Old 19th May 2017, 18:39   #183
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Default Re: GST effect on car prices?

Poor move by the Government. Agree that the SHVS was a start/stop technology but it is still hybrid in some form. If there is no benefit to the manufacturer or consumer in a monetary form, how will they be incentivized to manufacture/buy hybrids. SHVS was a shakeup in the market with many in Delhi opting for Hybrids and Hyundai being forced to consider it in the future. This kind of move will kill the market for hybrids

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Originally Posted by Turbanator View Post

But Yes, Government should have come with something better for true hybrids, say with 5 % GST.
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Old 19th May 2017, 19:00   #184
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Default Re: GST effect on car prices?

Quote:
Originally Posted by RavenAvi View Post
Here's the complete picture:
RC Bhargava, Chairman, Maruti Suzuki India Ltd.:
"We can’t understand why the government is discouraging hybrids. It is almost like saying don’t buy hybrids. There will be no point in making hybrids if they are taxed as much…we will stop making them.
The rates for most categories have been kept the same…there is going to be no change in the prices of those vehicles."

SHVS is a hybrid? Stop joking Maruti. The exploitation by you in the name of SHVS is the reason why govt stopped subsidies under FAME scheme. Just few days ago same Maruti guys were worried about Niti Aayog suggestions for moving to electric vehicles.

On the other hand, I hope the govt comes up with different tax slab for fully electric vehicles. I would like them to be as below at least for the next 5 years:

Made in India:
Fully electric vehicles with more than 200 miles (320 KM) range - 0%
Hybrid vehicles with minimum 100 km electric range - 5%

Imported/CBU:
Fully electric vehicles with more than 200 miles (320 KM) range - 12%
Hybrid vehicles with minimum 100 km electric range - 18%

Rest all electric vehicles with tiny puny battery capacities with low ranges should be taxed 28% only. Also, Distinction between different electric vehicles should be range only, not size or price category (luxury etc...).


Last edited by sri_tesla : 19th May 2017 at 19:02.
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Old 19th May 2017, 19:05   #185
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Default Re: GST effect on car prices?

Pardon me for the noob question, is there a clear definition on whether the GST Cess is a tax on tax or tax on value of the item? If it is the former then we are saved, only marginally though.

Meanwhile, all the bigwigs are at the receiving end of GST benefits with cheaper luxury cars/SUV's.

Last edited by jetsetgo08 : 19th May 2017 at 19:06.
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Old 19th May 2017, 19:38   #186
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I was dreaming of lower tax for True Hybrids (Prius/Camry/Lexus Range). But again GOI has disappointed me, really don't know who they are looking at reducing Carbon Footprint by banning Diesel & Petrol Vehicles by 2030.

Hey, when you don't have Hybrids/Electric Cars ? How can you reduce pollution ?

Yes, it still is 13 years away, but GST was perfect timing for GOI to promote Hybrids/Electric Vehicles by lowering Tax Rate or eliminate Cess.

Last edited by CarguyNish : 19th May 2017 at 19:39.
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Old 19th May 2017, 21:01   #187
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GST rate for fully electric vehicles is 12%+ zero cess
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Old 19th May 2017, 21:55   #188
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Default Re: GST effect on car prices?

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Originally Posted by y2ksrs View Post
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?
It isn't like the usual cess applicable on Income Tax etc. Cess in GST is meant as a tool to bridge the gap between the aggregate present tax and the maximum GST. For example, in case of mid segment cars, the present combined taxes of ED and VAT works out to approx 42% (24% ED and 14.5% VAT) whereas the maximum rate in the GST act is 28% only. So the balance 14% or so is recovered by way of Cess.

Excise duty is shared between Centre and State and with the implementation of GST, the State would loose revenue and in order to compensate the States for this loss, Cess has been introduced and will be calculated on the basic amount and not on the GST tax amount.
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Old 19th May 2017, 22:20   #189
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Default Re: GST effect on car prices?

GST on full electric vehicles = 12%
GST on Hybrid vehicles = same tax as luxury vehicles (28% +

Now, I know the reason why all the automakers are crying. They want to sell their silly Hybrid vehicles like Accord and Camry's with tiny batteries and benefit from the subsidies. They wont even pass that benefit to customers. They charge much more than regular models for the so called hybrids. Lets not even talk about the Suzuki's SHVS system. I am glad govt quickly understood the scam in the name of these mild Hybrids.

With GST for fully electric vehicles at 12%, the minimum difference in taxes between electric vehicles and small cars will be 17%. The difference will be 31% for all 4 Metre+ cars (hybrid or not) and electric vehicles, which will be a great advantage for full electric vehicles

Last edited by sri_tesla : 19th May 2017 at 22:22.
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Old 19th May 2017, 22:34   #190
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Default Re: GST effect on car prices?

Well, our Government continues to hold 64% of IOCL, 54% of BPCL and 51% of HPCL... Now why would they want to promote hybrid cars? GOI should realize that we are no longer in a comfortable position. Pollution in major cities are alarmingly high, and if we still don't stimulate / promote hybrids, we will soon have to meet dire consequences.
And, full electric cars are not practical yet, with their limited range and performance.

Last edited by aravind.anand : 19th May 2017 at 22:36.
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Old 19th May 2017, 22:47   #191
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Default Re: GST effect on car prices?

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Originally Posted by aravind.anand View Post
Well, our Government continues to hold 64% of IOCL, 54% of BPCL and 51% of HPCL... Now why would they want to promote hybrid cars? GOI should realize that we are no longer in a comfortable position. Pollution in major cities are alarmingly high, and if we still don't stimulate / promote clean fuels, we will soon have to meet dire consequences.
And, full electric cars are not practical yet, with their limited range and performance.
Well, govt actually set GST much lower for full electric vehicles (12%) than regular cars which puts them at huge advantage over ICE (fuel based) cars.

Coming to Hybrid vehicles, I think govt learned quickly from the FAME scheme exploitation by the car makers in the last 2 years and made a correct decision. Currently in India there are no Hybrid vehicles that are being sold with reasonable electric only range. Hybrid vehicles should have at least 40-50 KMs of electric only range to make the difference to environment and the owner of the vehicle.

Also, full electric vehicles will have great performance and instant torque will be fun. The fastest production car in the world is an electric vehicle and its 2.3 ton 4-door family sedan. Only problem is they (full electric) are not available in India and it will change in the next few years.
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Old 19th May 2017, 23:41   #192
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Default Re: GST effect on car prices?

This table should give a much better idea of what to expect in each category after July 1st:

GST effect on car prices?-newtableforgst.jpg

Quote:
The SUV segment, which has seen handsome growth of 29.91% in FY2017, is currently subjected to a heavy tax structure of around 55 percent – SUVs and large cars with engines bigger than 1500cc. Now, implementation of GST will effectively reduce this to 43 percent – 28 percent GST plus 15 percent cess. Clearly, this will act as a huge fillip to SUV as well as luxury car sales.

Mid-segment cars (sedans and SUVs with engines less then 1500cc), which are already taxed at around 43 percent, will not be impacted greatly due to the implementation of GST. With two-wheelers, three-wheelers and small cars set to see a marginal increase of 1-2% tax (28% GST + 1-3% Cess), the impact is expected to be negligible. Effect on consumer sentiments is expected to be negligible as dealers and OEMs usually tend to offer benefits to the consumer in the range of 1-2 percent. The Commercial vehicle segment, which currently is taxed at around 12.5 percent excise plus 12.5-14.5 percent State VAT, will see a flat GST tax of 28 percent. The difference of 1-2 percent ies estimated to have little or negligible impact on the segment.

Automotive components are proposed to be taxed at 28 percent GST. This could push up cost of aftersales service and maintenance of vehicles, coupled with a possible increase in tax rate for services as well from 15 to 18 percent.
Autocar Professional

Last edited by RavenAvi : 19th May 2017 at 23:55. Reason: small edit.
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Old 19th May 2017, 23:44   #193
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Is GST going to have any impact on the road tax? How I wish there was a single unified road tax across all states in India!
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Old 20th May 2017, 00:35   #194
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I was hoping that the GST rule would remove the stupid and unfair 1200cc cap for petrol small cars and bring in a uniform 1500cc cap. This stupid rule killed the Abarth Punto (due to high taxes, making it expensive, while in reality it was only as expensive as a GT TSI ex-factory) and the foreseeable future of affordable petrol hot hatches in India and it continues.

I am happy that the cheater techs SHVS and the likes did not get back any subsidy. Providing more subsidy to a dirty diesel car over petrol on top of subsidised diesel is a big mockery of 'green' scheme and an insult to the heavily injured environment.

It would have been good to have some subsidy on real hybrids with 50+ km range though. Such a tech in affordable cars would go a long way in cleaning up the urban air.
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Old 20th May 2017, 08:54   #195
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Default Re: GST effect on car prices?

Quote:
Originally Posted by RavenAvi View Post
This table should give a much better idea of what to expect in each category after July 1st:

Are the automakers ignoring, one of the key things being highlighted by the Govt = input tax credit?

As I understand, in the GST regime, companies need not pay GST to the extent of GST paid by them towards acquiring the input raw materials. This in itself, should effectively reduce the net tax on the product although the tax percentage might have remained the same. So, they should ideally reduce their ex-factory prices to reflect this benefit, there by reducing the overall tax too.

Read the related article from timesofindia @ http://timesofindia.indiatimes.com/b...w/58758653.cms
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