[ac-cobra]

Originally Posted by rugsrags

There is a notification that has come out. The base rate has been reduced to 18% from the previous 28% but the cess remains as on new cars so the effective rate will be around 33% ... GST is mandatory and has to be charged it's just that the govt coffers will keep increasing with no respite to the biggest tax contributors i.e the companies... I think the government only wants individuals to buy smaller cars....

Does this mean that luxury cars will now be taxed at 18% GST + 25% Cess = 43%, instead of 53%?

[rugsrags]

Originally Posted by ac-cobra

Does this mean that luxury cars will now be taxed at 18% GST + 25% Cess = 43%, instead of 53%?

This is for company owned used car sales.

[Santoshbhat]

Originally Posted by rugsrags

This is for company owned used car sales.

Is this the notification. Totally unfair . It says 65% of the original GST rate, while its silent on cess. It is also silent on cases where the car is purchased post 1st July 2017. If such a car is sold, do they want full tax?

Totally illogical in my opinion. Suppose a company buys a car for 50L. It pays nearly 25L in taxes. Now after a few years, the car is being sold for 25L. They want 10L tax again on this. On a 50L car, Govt. wants to earn 35L in taxes . And all this will have to be borne by the company that is the selling the car as no buyer will agree to pay the GST on used car.

[Turbanator]

Is this the notification.

I think this is regarding Lease cars only or Dealerships holding old stocks

---
Condition
1.
The Motor Vehicles was purchased by the lesser prior to 1st July, 2017 and supplied on lease before 1st July, 2017

2.
i. The supplier of Motor Vehicle is a registered person.
ii. Such supplier had purchased the Motor Vehicle prior to 1st July, 2017 and has not availed input tax credit of central excise duty, Value Added
Tax or any other taxes paid on such vehicles

[Santoshbhat]

Originally Posted by Turbanator

I think this is regarding Lease cars only or Dealerships holding old stocks

I thought so too, but this article interprets it as applicable for sale of used car by a registered entity.

Here's another interpretation. Here the author says that since input credit is not allowed on motor vehicles for non transport and vehicle businesses, this asset is not considered as used in the course of furtherance of assessee's business. So GST is not applicable on such assets when they are sold. Good luck explaining that to the authorities!

I think there is no clarity on the issue yet. This question is so popular on google that it autoprompts .

[rugsrags]

We'll IV had a discussion with a lot of chartered accountants now and all of them have checked and told me that this GST will be charged as per the above notification.

[CarguyNish]

Yesterday there was revision in rates of over 50 odd goods.

But, the thing that caught my eye was this, refer the image below.



28% to 18% on Medium, Large Cars & SUVs ?
Can anyone here confirm if this is true ?

If it's true, will there be revision in prices again ?

There are rumours that only 2 slab rates will be carried. My guess is 18% & 5%.

[Santoshbhat]

Originally Posted by CarguyNish

Yesterday there was revision in rates of over 50 odd goods.

But, the thing that caught my eye was this, refer the image below.

28% to 18% on Medium, Large Cars & SUVs ?
Can anyone here confirm if this is true ?

If it's true, will there be revision in prices again ?

There are rumours that only 2 slab rates will be carried. My guess is 18% & 5%.

That is for used cars only . Since there was no distinction between old and new cars thus far, the same rate as new car was applicable even on used cars. Now they have come up with a separate reduced rate for used cars. What about cess? Does cess apply on used cars? This is just daylight robbery. Charge heavy tax on cars, don't allow input credit and then charge heavy tax on resale as well??!!! They know the target audience in this case is neither united nor is it a big enough problem for businesses to complain about and raise a voice. They will save that for other aspects which directly affect their business.

[manaljain]

To make the used cars much more affordable, the GST Council announced a reduction in the tax rate on second-hand vehicle.
The tax rate on used car transactions has been reduced to 18 percent for large cars and SUVs, and 12 percent for small vehicles, from 28 percent.
Apex industry body Society of Indian Automobile Manufacturers (SIAM) that had urged the government to reduce the tax under GST welcomed the move and said this will revive the demand for second-hand cars.

[Turbanator]

I am still not clear, is this Tax applicable to the resellers on the difference in purchase and sales price or on the complete sale price?

Also, it's not clear if this will be on private or corporate sales as well considering no inputs are allowed to corporates under GST and individuals won't have a GST number.

[rugsrags]

The difference in price falls under the marginal scheme and is for registered used car dealers. Individuals do not have to charge any GST. The 18% plus surcharge is only for used company owned cars. So at the end of the day companies as usual will bear the full brunt of the taxing system.

[aviral2122]

I have a question in my mind.
After GST how are the discounts to be implemented?

For example if say BMW is offering a 530i with a discount of 6 lac rupees on ex showroom (originally ex showroom being say 48 lac) how it will be calculated?

A) 32,43, 243 + 48% GST= 48,00,000 MINUS 6,00,000 = 42,00,000
Or
B) 32,43,243 minus 4,05,405(discount) =28,37,838 + 48% GST = 42,00,000

Although the end consumer gets the car at same ex showroom prices, the dealer gets to save on taxes.

Now would that mean that the saving in taxes if calculations is done in B way should also be passed because the actual GST+CESS payable by him was 15,56,756 but now he needs to pay only 13,62,162 or in other words should the discount figure have remained 6,00,000 in lieu of 4,05,405?
Or is dealer saving on tax payable illegally, or maybe not passing the full benefit of it or is the calculation B the right way to go about it.

Confused.

Note 32,43,243 is derived from 48 lac minus 48%(gst+cess) and all figures of exshowroom and discounts are imaginary.

[volkman10]

Carmakers start offering uniform prices pan-India

This change is happening thanks to GST (goods and services tax) being in place, which has eliminated various and varied state levies such as excise duty, VAT (value-added tax), infrastructure cess, octroi etc.

On-road prices however may still wary from city to city and state to state in light of the fact that road taxes and registration charges continue to vary

Link

[ownerofazkaban]

Originally Posted by aviral2122

I have a question in my mind.
After GST how are the discounts to be implemented?

A) 32,43, 243 + 48% GST= 48,00,000 MINUS 6,00,000 = 42,00,000
Or
B) 32,43,243 minus 4,05,405(discount) =28,37,838 + 48% GST = 42,00,000
.

I have received proforma invoice with discount added in B and nett ex show room price is down. For 15k discount, net discount is 19k around.

Also I was told that RTO uses slabs of 1.5L something and unless discount crosses the bands, road tax remains same.

[s10]

Will this change have any impact on car leasing?
Specifically for people who leased vehicles before Jul'17, will this reduce anything in the existing lease or in the payment of residual value?

We are facing maximum brunt of GST