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Old 20th May 2017, 09:07   #196
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Default Re: GST effect on car prices?

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Originally Posted by DImPo View Post
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.
CNBC seems to say otherwise.
https://twitter.com/CNBCTV18News/sta...26245940797441
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GST effect on car prices?-dao1texgaerydh.jpg  

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Old 20th May 2017, 09:52   #197
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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
Input tax credit is already available under current tax regime (Central Excise and State VAT). Unless vendors reduce their basic price, their landed input costs aren't coming down.

There is a huge pressure from Auto majors on all vendors to reduce basic price citing GST. But basically for someone who is already under Central excise and VAT, I don't see any reduction happening in costs and prices. Just the tax rates undergo a small change, but since it was all vattable from the beginning, it won't affect final landed price.
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Old 20th May 2017, 10:22   #198
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Default Re: GST effect on car prices?

If I am reading it right, GST will stop the monstrosity (read shaving and chopping) that's influencing automobile designs currently to take advantage of the small car benefits.

A few centimetres here or there is not going to help with congestion. People will buy cars as long as public transport isn't capable enough. Atleast the cab aggregators have reduced the compulsion to add a second car to the garage to a great extent.

What we really need is excise benefits for promoting green credentials akin to western countries, ratings based on CO2, NOX etc. And that should be checked under all conditions. Low, partial and full loading even for passenger cars. The puny engines good only during idling will suffer with the numbers. And contrary to popular belief, some bigger engines are really clean in the real world conditions.

And I would also recommend some benefits for cars with better safety ratings as well considering how unsafe our roads are.

Last edited by deetjohn : 20th May 2017 at 10:23. Reason: Typo.
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Old 20th May 2017, 14:14   #199
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Default Re: GST effect on car prices?

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Originally Posted by y2ksrs View Post
CNBC seems to say otherwise.
Looks like CNBC has got it wrong. You may like to visit the following link of Business Standard where it is clarified that the total tax under GST inclusive of cess on large luxury cars and SUVs may be 43 per cent, against existing (ED+VAT) incidence of 41 to 45 per cent.

http://www.business-standard.com/art...1900068_1.html
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Old 20th May 2017, 15:01   #200
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Default Re: GST effect on car prices?

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...You may like to visit the following link of Business Standard where it is clarified that the total tax under GST inclusive of cess on large luxury cars and SUVs may be 43 per cent, against existing (ED+VAT) incidence of 41 to 45 per cent.

http://www.business-standard.com/art...1900068_1.html


I just saw the Video above on YouTube from BMW. Exciting the market that they are passing in the GST benefit right away. Possibly post GST prices at today's date.

Has anyone heard of any new offers floating around?
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Old 20th May 2017, 15:16   #201
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Default Re: GST effect on car prices?

What I can figure out from the box is that while small cars will go up, larger vehicles should come down. The scenario regarding EVs and hybrids looks muddled. I guess the smoke will clear in due course.

One point has there been any rationalization in the road tax?
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Old 20th May 2017, 16:47   #202
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Default GST effect on car prices?

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Originally Posted by BeamerBoy View Post




I just saw the Video above on YouTube from BMW. Exciting the market that they are passing in the GST benefit right away. Possibly post GST prices at today's date.



Has anyone heard of any new offers floating around?

All of them are already discounting big time. BMW looks to have made the first move. Lower pricing due to reduced tax means that they have to discount less ?

So 54 lakhs OTR but after discounts say 47. Now post GST it could be 52 lakhs and the still discount to 47 ? So is that a net gain of 2 lakhs for the dealer/ manufacturer against current pricing and discounts ?

Last edited by Arjun Reddy : 20th May 2017 at 16:48.
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Old 20th May 2017, 17:15   #203
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Default Re: GST effect on car prices?

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All of them are already discounting big time. BMW looks to have made the first move. Lower pricing due to reduced tax means that they have to discount less ?

So 54 lakhs OTR but after discounts say 47. Now post GST it could be 52 lakhs and the still discount to 47 ? So is that a net gain of 2 lakhs for the dealer/ manufacturer against current pricing and discounts ?
My guess is they will bring the EX showroom prices down and slowly lower the discounts also like you said. GST will surely help them improve their profitability.

One good thing is that the ex showroom price will be or should I say, should be the same across the country. Only road tax will vary state to state. I am sorry if this has been discussed before, but under GST will it be easier for some one to buy a car in another state and straight away take it their RTO and register it? No local taxes to worry about since invoice includes GST?? Competition between dealers will truly heat up if that's the case as state boundaries that exist today will be gone.
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Old 20th May 2017, 17:27   #204
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Default Re: GST effect on car prices?

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Originally Posted by Arjun Reddy View Post
All of them are already discounting big time. BMW looks to have made the first move. Lower pricing due to reduced tax means that they have to discount less ?

So 54 lakhs OTR but after discounts say 47. Now post GST it could be 52 lakhs and the still discount to 47 ? So is that a net gain of 2 lakhs for the dealer/ manufacturer against current pricing and discounts ?
Fellow T-BHPian MOOM got a further almost 2L discount on a 520D (OTR), so hope the discounts don't reduce but smart way of BMW to push existing stock out without increasing the discounts.
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Old 20th May 2017, 19:06   #205
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The article in ET says that GST will make small cars dearer and big expensive luxury machines less expensive.
Rather a paradox isnt it?
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Old 20th May 2017, 21:19   #206
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Pardon if this has been already answered. I have booked a Tata hexa last week. Should I take the delivery in june or should I push it to july when GST comes into effect? Will there be a decrease or increase in prices? I have read few articles on GST and I am confused on this issue.

Regards.
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Old 20th May 2017, 22:38   #207
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Default Re: GST effect on car prices?

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Originally Posted by Vikvkv View Post
Pardon if this has been already answered. I have booked a Tata hexa last week. Should I take the delivery in june or should I push it to july when GST comes into effect? Will there be a decrease or increase in prices? I have read few articles on GST and I am confused on this issue.

Regards.
I would suggest you to take the delivery in July , as per my understanding there would be minimum 7% reduction in prices for Hexa

Current tax structure
Excise Duty 30
Infra cess 4
VAT 14.5
NCCD 1
Total 49.5

Post GST: 28+15 = 43%
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Old 21st May 2017, 01:02   #208
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Default Re: GST effect on car prices?

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Originally Posted by rameshwiz07 View Post
I would suggest you to take the delivery in July , as per my understanding there would be minimum 7% reduction in prices for Hexa

Current tax structure
Excise Duty 30
Infra cess 4
VAT 14.5
NCCD 1
Total 49.5

Post GST: 28+15 = 43%
Current tax structure
Excise Duty 30 %
Infra cess 4 %
VAT 14.5 %
NCCD 1 %
Luxury Tax 1% ( Above 10 L )
Krishi Kalyan Cess 0.5 %
CST 2% ( Central Sales Tax )

Total 53 %

Post GST: 28+15 = 43%

Difference 10 %

Also usually cess is calculated on top of tax. So in GST if this is different and calculated on value, then the effective price will even come down further.

http://www.financialexpress.com/auto...budget/221950/

http://www.livemint.com/Money/G0z5a0...-your-car.html

Last edited by LionX : 21st May 2017 at 01:14.
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Old 21st May 2017, 11:29   #209
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What happens to road tax? This is still with the State government's, purview right? Wish there was a min / max % for Road Tax that a state can charge, this way states like Karnataka cannot charge exorbitantly higher than the others.
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Old 21st May 2017, 12:32   #210
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Default Re: GST effect on car prices?

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My guess is they will bring the EX showroom prices down and slowly lower the discounts also like you said.
Yes, I believe one of the provisions in GST is Right to Value Goods, so if MRP is 100 and invoice prices after discounts is 80 chances are that Dealer may be asked to calculate GST considering sales price of Rs 100 and Government may disallow Discounting part for calculation of GST. So most likely MRP will be reduced and high discounts on Luxury cars will go away.

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What happens to road tax? This is still with the State government's, purview right?
Unfortunately, it is still with States and not under GST.
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