[volkman10]

Auto Industry divided over GST, proposes twin rate structure,

1. As Luxury cars not defined under GST
2. Specification on length, horse power for defining luxury.










Link

[JoyPangli]

Cess Capped at 15%.
"Capping of cess has been done. These are not actual, but, ceiling is kept higher to give a marginal headspace," Jaitley said.

So, the maximum tax rate on luxury cars could be 28% + 15% = 43%. It is more likely to be 40% according to some statements given by Jaitley last year. Also, the maximum cap for GST is 40%.

Experts please check my calculations.
For Punjab - current effective rate: Excise 30%, CST 2%, VAT 14.30%
(1+30%) X (1+2%) X (1+14.30%) = 51.36% effective rate.

In case of 28+15 = 43% GST rate, 5.65% drop in luxury car prices
In case of 28+12 = 40% GST rate, 7.63% drop in luxury car prices

Good news for luxury car buyers?

[sgiitk]

The 'mantra' seems to be, at least in phase I, to keep the prices/taxation at the same level as before. Since by and large Cars will attract 28% plus whatever, this whatever will hopefully take care. I guess some mid-range state will be taken as the 'model'.

[arakhanna]

Originally Posted by sgiitk

The 'mantra' seems to be, at least in phase I, to keep the prices/taxation at the same level as before. Since by and large Cars will attract 28% plus whatever, this whatever will hopefully take care. I guess some mid-range state will be taken as the 'model'.

Expect a price cut rather than status quo. The math works out in favor of price cut given that cess rates have been capped at 15% above highest rate of 28% in GST.

In my professional capacity spoke with the head of the GST council and he indicated that rates will be out by April. The reason is it would be difficult to keep such information private for long, given the huge number of people that would have access to the same.

So those planning to purchase a vehicle should wait for a month or so and take an informed decision.

[pacman2881]

Taxes on premium and luxury cars under the GST regime will be about four to 12 percentage points lower, but the cess on demerit goods may play a spoilsport

“I am not swearing by those numbers because the state governments can levy an additional duty,” said Shekar Viswanathan, vice-chairman at Toyota Kirloskar Motor Pvt. Ltd.

http://www.livemint.com/Industry/TFX...ar-buyers.html


Any idea if the rates are going to be decided on 31st March?

[m8002?]

This article talks of a cess of max 15% for luxury cars. Is this on top of the 28% GST?

http://www.rediff.com/business/repor...t/20170328.htm

[pacman2881]

GST will impact company car lease going forward?

GST would be payable if there is a supply of free goods or services to an employee exceeding the stipulated sum, if an employee avails of a company asset for personal use (say , a car), it would trigger GST.

"Going by the strict interpretation, if a company provides a car to an employee for his use (both official and private) the usage could be considered as a supply of service to the employee, which is a taxable event for GST. In such a case, the company should be given the benefit of input tax credit and proper valuation norms must exist to ensure that GST is levied fairly and not on the fair market value, but rather the cost or depreciated value of such assets, says Pimprikar.

Read more at:
http://economictimes.indiatimes.com/...campaign=cppst

Can someone throw some light on this?

[JKBKS]

Originally Posted by pacman2881

Can someone throw some light on this?

I think this will be applicable to top mgmt. people (CXO levels) who get company paid & maintained cars.

[pacman2881]

Originally Posted by JKBKS

I think this will be applicable to top mgmt. people (CXO levels) who get company paid & maintained cars.

Yes, but technically anyone who has a company leased car uses a car in the company's car don't they?
GST may be a good thing in the long run but I really wish the Government clarifies the nitty gritty earlier.

I have been planning for my next car for years and here comes the Government with a new tax regime which they don't clarify even two months before implementation. Now it is unclear if I have to wait for the new prices. I do not know if it is better to take the lease option. I do not know if it can be diesel or petrol as NGT will wake up one day and say you can't run diesel cars. If this is what is the case for an individual for a car buying decision, god save those honest small businesses.

[JKBKS]

Originally Posted by pacman2881

Yes, but technically anyone who has a company leased car uses a car in the company's car don't they?

I think there is a difference. People who use company lease car program to buy a car pay the monthly EMIs from their pre-tax monthly income (as is the case in my company). Whereas the CXO level guys usually negotiate a company paid/maintained car as part of their Joining Offer letters and it seems these guys will get covered now.

[abhi182]

Any further updates on this from those closely following this?
I am in the market for a 3GT (or similar) in Maharashtra with an outside LBT address for registration.
Would it make sense to defer the purchase by a couple of months?

[harshunlimited]

Originally Posted by JoyPangli

Experts please check my calculations.
For Punjab - current effective rate: Excise 30%, CST 2%, VAT 14.30%
(1+30%) X (1+2%) X (1+14.30%) = 51.36% effective rate.

In case of 28+15 = 43% GST rate, 5.65% drop in luxury car prices
In case of 28+12 = 40% GST rate, 7.63% drop in luxury car prices

Good news for luxury car buyers?

Or it could be that, the Cess is charged on top of the item value + sales tax, in that case, it ll be (100 + 100X28%) X 15% = 47.2% effective rate.

So, the luxury car (whose definition is still not clear w.r.t. GST) that earlier cost you Rs.151.36 in Punjab will now cost 147.20, i.e. a drop of 2.75% (and not 4.16%) on the current OTR Price.

[LionX]

"The final nod to the four rules and the GST rates for major commodities and services will be done during a meeting in Srinagar on May 18-19. Sources said that the rates will be released closer to the implementation date as the government wants to avoid any arbitrage opportunity"


http://timesofindia.indiatimes.com/b...w/57952490.cms

[JoyPangli]

Originally Posted by harshunlimited

Or it could be that, the Cess is charged on top of the item value + sales tax, in that case, it ll be (100 + 100X28%) X 15% = 47.2% effective rate.

Cess is always on the base price, like we have seen in the case of Education cess, Cow Cess etc. Cascading effect will not be there. Infact, there is another thread where people have challenged in court that the road tax should also be on the base price (not including the taxes). Let's hope some sense prevails.

[rdst_1]

Originally Posted by JoyPangli

Cess is always on the base price, like we have seen in the case of Education cess, Cow Cess etc. Cascading effect will not be there. Infact, there is another thread where people have challenged in court that the road tax should also be on the base price (not including the taxes). Let's hope some sense prevails.

Cess is never charged on the base price. It is always charged on the tax component. It is a cess on tax and not on price.