[Swapnil4585]

Originally Posted by FIAT3031

1) Govt Proposal: Single tax slab for all modes of transport ( yes SINGLE TAX)
That means a person who buys a 2-wheeler and a person who buys a Merc pays the same tax.
However this proposal will never see the light of the day.

2) Small car manf. are pushing for a Dual tax rate.
This is because multiple social & income strata exist in India
Hence lower GST rates for 2-Wheelers, 3 wheelers, small cars & CV
Higher GST for luxury & large cars

Under the Goods and Service Tax regime, there ought to be 3 rates of tax, flat. These 3 rates are determined on the purpose / utility that the concerned Goods / Service offer. Generally, they are broadly categorized as under -

1. Industrial Inputs (proposed 12%) -

In this class of Goods / Services, the rate of tax has to be lower ideally, in order to boost manufacturing from the small scale and medium scale industries. If in case of stagnation, the Government decides to lower the rate of tax for this class of goods, the loss in revenue is off-set by a corresponding increase in the rate of tax of Goods / Services belonging to the luxurious group.

2. Revenue Neutral Rate (proposed 17%/18%) -

In this class of Goods / Services, the rate of tax should remain unaffected even if rate of tax on industrial inputs and luxury items is increased or decreased. However in the VAT era, we've seen some States increasing the revenue neutral rate too.

3. Luxurious Items (proposed 40%) -

Imported cars / motorcycles, all types of liquor and wine, tobacco and the alike, certain petroleum products, are the ones that are taxed heavily.

The sale of cars, two wheeled bikes, auto rickshaws, manufactured fully in India will be taxed at the revenue neutral rate. It is expected that the current bifurcations created by the Excise duty on the basis of length and engine capacity shall be removed.

[Swapnil4585]

Originally Posted by micrographics

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CGST - Central GST for Interstate Transaction (Input Credit available only if you buy from one state and sell to other state)

LGST - Local GST (for local sales/purchases)

IGST - This is the GST on Import of Services for which no Input Credit will be available.

CGST is Central Goods and Service Tax. The Input Tax Credit can be adjusted against the following output taxes, and in that order-

1. CGST
2. IGST
3. SGST
4. Any balance input tax credit remaining after adjusting the above, shall be either carried forward to the next return period, or can be claimed as refund.

IGST is the Integrated Goods and Service tax, and it will be a tax on inter state trade. The Input Tax Credit shall be adjusted against the following output taxes, and in that order-

1. IGST
2. CGST
3. SGST
4. Any balance input tax credit remaining after adjusting the above, shall be either carried forward to the next return period, or can be claimed as refund.

There is no concept of LGST.

Most of the items will fall under 20% bracket hence cost of products will go up.

For example, if I buy a Product worth Rs. 100/- from other state and pay GST of 20% then my cost will be Rs. 120/-.

Then sell it to local consumer after adding my margin. In this case cost to local user will be high.

Remember, this blanket rate of 20% (it's 18% as per the talks going on now) includes excise, local VAT, CST+VAT in case the purchasing is affected from other State, Octroi, etc.

Theoretically, the cost of manufacturing will go down somewhat, but don't expect much benefit to the end consumers. The biggest benefit of this tax reform is the simplicity of compliance.

[RavenAvi]

The upcoming GST (Goods & Service Tax) Bill, which is all set to be pushed for approval by the Government of India during the Monsoon Session of the Parliament, will add benefits of upto (GST rates) 18% to the auto industry.

Cars which are under 4 metres in length and have engine sizes less than 1,200cc for petrols and 1,500cc for diesels, will come down to 18% of their pricings from their current 24% block. This will make them cheaper by around 6-7%.

But conversely, cars which are over 4 metres in length and have engine sizes of more than 1,500cc are expected to get more costlier by the same 6-7 percentage.

The biggest beneficiaries of the GST Bill, whose impact will be felt in the auto sector from early-2017 onwards, would be the domestic car majors such as Maruti-Suzuki and Mahindra & Mahindra, since both companies have a large number of mass market offerings which come under both - less than 4 metres in length and less than 1,200cc (petrol) and 1,500cc (diesel) engine displacements.

This GST Bill will most likely benefit Maruti Suzuki in the country, as most of its cars are equipped with less than 1.5L diesel and 1.2L petrol engines. Its top-selling products- Swift, Swift Dzire, Vitara Brezza, Alto, Baleno and others are equipped with engines less than 1,200cc petrol and 1,500cc diesel.

Other than Maruti, Mahindra will also likely to gain some benefit from this proposed GST Bill. Mahindra is currently selling the KUV100, TUV300 and the NuvoSport sub-4 metre SUVs equipped with engines less than 1,500cc displacements.

OnCars

[Turbanator]

I think it will be too early to comment on the impact on Auto Segment. Government is not going to lose a paisa then what they already earn & similarly 6-7 % increase will be too much.

[sgiitk]

I expect GST as a whole to have a positive effect. Why, cars are essentially built from parts, some of which are from other states. All these attract CST so the taxation is at least two point, and will be cascading. High tax states like MH, KA will see a bigger impact.

[LandCruiser]

This article says price for cars more than 4m will increase. Way to go, loads of cramped sub 4m cars already in the market.

http://profit.ndtv.com/news/market/a...=home-business

[a4anurag]

Wheels of Rajya Sabha turning in favour of govt on GST bill

AIADMK, CPM and CPI, which the government feels are veering around to supporting - or at least not opposing - the GST bill, hold the key to the balance of forces in Rajya Sabha with regard to the landmark tax reform.

The proposed legislation can still be obstructed by Congress, which is insisting on the 18% rate being written into the Constitutional amendment bill, as the House will need to be in order for a vote to be taken. But the numbers have now tilted against Congress and it is isolated, with senior CPM members stating that the bill will not be opposed.

The government is looking to bring the GST bill for consideration during the monsoon session in July-August, hoping that AIADMK, CPM and CPI with 22 members will by then formally agree to support the reform measure.

SOURCE: http://auto.economictimes.indiatimes...-bill/52844832

[sgiitk]

@a4anurag; They will may mind the RS turning down the GST bill, since then in a Joint Session they will force it through. I expect the Congress to walk out and let it through. But all depends on what their VP thinks!

[sdp1975]

GST - taxation reform , or a hard and punitive piece of legislation ?

http://www.financialexpress.com/fe-c...es-why/322519/

[JoyPangli]

This may be a dumb question but does anyone have any idea if Road Tax or Registration Tax on Cars would still be around once GST passed or would GST subsume this as well? The reason I am asking is because Entertainment tax and Octroi and other bunch of local taxes would be done away with after GST is passed.

[Turbanator]

any idea if Road Tax or Registration Tax on Cars would still be around once GST passed

Interesting query, given the way Road Tax is charged by states, it will in all probability stay as this is not a Sales Tax but Registration Tax. Entertainment tax may actually get added in service Tax. Octroi may be removed altogether due to proposed GST legislation more than anything else

[MSAneesh]

GST passed in Rajya Sabha.
http://timesofindia.indiatimes.com/i...w/53529041.cms

Hope it will have a positive impact on car prices.
Has Maruti hiked prices to not pass it on to buyers? Heard other manufacturers may also follow suit.

[saket77]

Originally Posted by JoyPangli

This may be a dumb question but does anyone have any idea if Road Tax or Registration Tax on Cars would still be around once GST passed or would GST subsume this as well? The reason I am asking is because Entertainment tax and Octroi and other bunch of local taxes would be done away with after GST is passed.

Registration and road tax, in all probability will stay. However, the amount the buyer pays should come down as the ex-showroom price may decrease and state VAT may also vanish due to the GST effect. Currently we pay tax on tax in this case as road tax is calculated on ex-showroom (and not ex-factory) which includes state VAT. So, when you pay the road tax, you also pay tax on the state VAT component, which is called cascading effect. To abolish this sore point, is the main purpose of GST.

Regards,
Saket.

[DriveOnceMore]

Directly copy pasting words from ET:
AUTOMOBILES
Positive
On-road price of vehicles could drop by 8%, as per a report by Motilal Oswal Securities. Lower prices can be construed as indirect stimulus to boost volumes. Key beneficiaries: Maruti Suzuki, M&M; Eicher Motors' margins may expand.

Negative
Demand for commercial vehicles may be hit in the medium term. GST will subsume local taxes, reduce time at check-posts, ease logistics hurdles. With ..

[sgiitk]

Until there is some inkling on the actual GST rate, all speculation is just that. While hints are around that it may be 18% or so, there is even talk of 23% plus (Kerala FM). So i will just keep fingers crossed. By the looks of it run of the mill cars will become cheaper, so called luxury cars may face the chop.

Also, remember once tighter safety norms start kicking in, prices of the lower end cars (zilch for safety) may see up to 10% hits.