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Old 13th June 2017, 22:08   #331
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Default Re: GST effect on car prices?

Please correct me if I'm wrong. From what I read, spare parts will get taxed at 28% in GST whereas the current rate is 12%. Even considering the overall reduction in input costs due to GST, a 16% increase seems totally unwarranted.

So, maybe it will get a few thousands cheaper to buy a car, but it will cost many more thousands to maintain it. I'm surprised not many people are discussing this.
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Old 13th June 2017, 22:10   #332
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spare parts will get taxed at 28% in GST whereas the current rate is 12%.
Current rate should be 12,5 % Excise, 2 % CST - Manufacturer to Dealer and thereafter 12,5-14,5 % VAT.
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Old 13th June 2017, 22:15   #333
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Current rate should be 12,5 % Excise, 2 % CST - Manufacturer to Dealer and thereafter 12,5-14,5 % VAT.
Thanks for clarifying this sir! But, there's a huge spare parts lobby voicing this concern, especially traders body like CAIT who have mentioned this in the exact same words as I have.

I'm still slightly confused - Does that mean 12.5% Excise + 2% CST + 12.5% VAT which takes the total tax to 27% minimum currently on spares? What do the traders body stand to lose here? Why are they comparing this GST of 28% directly to previous taxation at 12%?

Last edited by jagzrk : 13th June 2017 at 22:19. Reason: More Queries >.<
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Old 13th June 2017, 22:18   #334
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takes the total tax to 27% minimum currently on spares?
Yes, trouble is that most of the Auto sector at retail is still run on cash, Invoices are sold separately to others who just need purchase bills and parts are sold to end customers without bills. Now large portion of this - 28 % will be collected at manufacturing plant and even if traders wants to save on tax they can do only to extent of GST portion on profits

Last edited by Turbanator : 13th June 2017 at 22:28.
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Old 14th June 2017, 14:36   #335
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Default Re: GST effect on car prices?

Is Toyota running any offers? I haven't seen any news coming from the big T yet. I am thinking Toyota is trying to find a loophole in GST which helps their bank balance.
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Old 14th June 2017, 14:59   #336
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Is Toyota running any offers? I haven't seen any news coming from the big T yet. I am thinking Toyota is trying to find a loophole in GST which helps their bank balance.
Since the monthly sales are good, May be they don't want to reduce the price now and wanted to get most of the profits till July 1. Once the GST is in place, they may not be able to do so because of the anti-profiteering clause in GST.

"Clause 171 has been inserted in the GST bill which provides that it is mandatory to pass on the benefit due to reduction in rate of tax or from input tax credit to the consumer by way of commensurate reduction in prices.
This clause further provides for the establishment of an authority against anti-profiteering in order to ensure its compliance. While the end consumer may have some reason to cheer, the industry is still doubtful of its implementation"

https://cleartax.in/s/anti-profiteering-gst-law


"Companies face the risk of government action if they raise prices in anticipation of the change in rates under the goods and services tax (GST) regime to be implemented from July 1, says Union revenue secretary Hasmukh Adhia. Any benefit of lower rates from GST, on account of input tax refunds, must be passed on, he underlined"

http://www.business-standard.com/art...1901575_1.html
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Old 14th June 2017, 15:06   #337
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Cross posting from the new car offers thread: Honda Customers who book between 10th and 30th June will get benefit of GST in July through a refund cheque if the ex showroom price of the car falls as a result of GST.

Two dealers in Mumbai have confirmed this offer. My dad has booked a WR-V and this offer will be applicable on the booking.

Last edited by AkMar : 14th June 2017 at 15:08.
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Old 14th June 2017, 16:03   #338
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Default Re: GST effect on car prices?

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Originally Posted by LionX View Post
Since the monthly sales are good, May be they don't want to reduce the price now and wanted to get most of the profits till July 1. Once the GST is in place, they may not be able to do so because of the anti-profiteering clause in GST.

"Clause 171 has been inserted in the GST bill which provides that it is mandatory to pass on the benefit due to reduction in rate of tax or from input tax credit to the consumer by way of commensurate reduction in prices.
This clause further provides for the establishment of an authority against anti-profiteering in order to ensure its compliance. While the end consumer may have some reason to cheer, the industry is still doubtful of its implementation"

https://cleartax.in/s/anti-profiteering-gst-law


"Companies face the risk of government action if they raise prices in anticipation of the change in rates under the goods and services tax (GST) regime to be implemented from July 1, says Union revenue secretary Hasmukh Adhia. Any benefit of lower rates from GST, on account of input tax refunds, must be passed on, he underlined"

http://www.business-standard.com/art...1901575_1.html
Good that this clause is there and the manufacturer has to pass on the benefit. But in Toyota's case, they have term called "rising input costs" which they employ quite often to raise prices. They would drop the price on July 1st and nothing stops them to increase it the very next month.
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Old 14th June 2017, 16:17   #339
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Originally Posted by nkrishnap View Post
But in Toyota's case, they have term called "rising input costs" which they employ quite often to raise prices. They would drop the price on July 1st and nothing stops them to increase it the very next month.
Thats correct. They have done it already, even before the GST. They have increased price for Fortuner & Innova by 3% from May 1. 'rising input cost' was the reason but limited to 2 models.
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Old 15th June 2017, 17:06   #340
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Hello fellow BHPians,

I need your help on making a decision. I have already booked the Skoda Rapid and the vehicle has arrived. The current ex-showroom price is 10,58,400 (15% RTO TAX) and they are providing a discount on the ex-showroom. They are quoting me 9,99,777 (10% RTO TAX) As a result of this, the RTO taxes have a net decrease of 5% (ex-showroom price is less than 10 lakhs).

So my question is, are the prices of Skoda Rapid 1.5 TDI MT AMBITION variant expected to decrease post GST? Should I wait for the purchase and make an invoice in July? Is the risk worth taking as this offer is till June 30th.
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Old 15th June 2017, 17:21   #341
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Originally Posted by jna4cob View Post
Hello fellow BHPians,

I need your help on making a decision. I have already booked the Skoda Rapid and the vehicle has arrived. The current ex-showroom price is 10,58,400 (15% RTO TAX) and they are providing a discount on the ex-showroom. They are quoting me 9,99,777 (10% RTO TAX) As a result of this, the RTO taxes have a net decrease of 5% (ex-showroom price is less than 10 lakhs).

So my question is, are the prices of Skoda Rapid 1.5 TDI MT AMBITION variant expected to decrease post GST? Should I wait for the purchase and make an invoice in July? Is the risk worth taking as this offer is till June 30th.
To the best of my knowledge, there will be hardly any price revision for C segment sedans post GST. Since you are close to 60K discount on ex-showroom price, you should go for it. Haggle for some free accessories and should be a good deal.
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Old 16th June 2017, 17:45   #342
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What will be the impact of GST on small petrol cars less than 4mtr length and under 1200cc IN KERALA. I am planning to buy a Maruti Suzuki Ignis Petrol (below 1200cc, less than 4Mtr length) and the ex showroom price is around Rs. 5.7L. Should I wait or buy it now accepting the Rs. 10000 offer. Suggestions
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Old 16th June 2017, 18:06   #343
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Default Re: GST effect on car prices?

Off topic
One of my carís insurance premium is due on 19th July 2017. Last year I paid them on 15th July. For this year I have received their quotation. However today got one more email from them, requesting to pay the premium before 30th June 2017 to avoid post-GST increase in tax. As per their email, present tax on insurance is 15 %. But same is going to increase to 18%.

Anyone with same situation? / Suggestions?
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Old 16th June 2017, 18:27   #344
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Originally Posted by Sail View Post
Off topic
One of my car’s insurance premium is due on 19th July 2017. Last year I paid them on 15th July. For this year I have received their quotation. However today got one more email from them, requesting to pay the premium before 30th June 2017 to avoid post-GST increase in tax. As per their email, present tax on insurance is 15 %. But same is going to increase to 18%.

Anyone with same situation? / Suggestions?
A friend of mine did some research and said hike would be around 1k for insurance premium around 13-14k
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Old 16th June 2017, 18:46   #345
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Originally Posted by AkMar View Post
Cross posting from the new car offers thread: Honda Customers who book between 10th and 30th June will get benefit of GST in July through a refund cheque if the ex showroom price of the car falls as a result of GST.

Two dealers in Mumbai have confirmed this offer. My dad has booked a WR-V and this offer will be applicable on the booking.
What about people who booked before June 10th and will be getting delivery after 1 July ? I am one such person...
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