Team-BHP > The Indian Car Scene


Reply
  Search this Thread
706,285 views
Old 30th May 2017, 16:24   #241
BHPian
 
vsun's Avatar
 
Join Date: Mar 2010
Location: Hyderabad
Posts: 130
Thanked: 109 Times
Re: GST effect on car prices?

Quote:
Originally Posted by Oxy View Post
I think booking the vehicle now should not be a problem.
Technically Yes. But, If I book the vehicle now, the dealer may start pressurizing me to take delivery of the vehicle (I already got a confirmation from the dealer that the variant I opted is readily available in his stock yard).
Also, I am in no hurry since I have not yet sold my old vehicle (Mahindra Scorpio).
vsun is offline  
Old 31st May 2017, 01:16   #242
BHPian
 
Shivjeet's Avatar
 
Join Date: Nov 2013
Location: Gurgaon
Posts: 153
Thanked: 688 Times
Re: GST effect on car prices?

Hey guys, can anyone please tell me what the effect of GST will be on CBU cars? I'm really worried as I have something on order.
Shivjeet is offline  
Old 31st May 2017, 09:01   #243
Team-BHP Support
 
Turbanator's Avatar
 
Join Date: Mar 2011
Location: Gurgaon
Posts: 6,681
Thanked: 28,121 Times
Re: GST effect on car prices?

Quote:
Originally Posted by Shivjeet View Post
Hey guys, can anyone please tell me what the effect of GST will be on CBU cars? I'm really worried as I have something on order.
Hi,
I will try, under present scenario Car CBU are taxed with 125% Basic custom Duty plus 1% Landing charges plus 30% CVD and some additional cess of 3 and 4%.Thereafter Manufacturers invoices to Dealer on 2% CST and at time of invoice dealer charges VAT which vary from state to state at present. So for an example a car with a FOB value of $ 100000 present costs with no margins of manufacturer or dealer - just taxes will be 1,80 Cr INR including VAT

Under GST regime apart from basic custom duty of 125% rest everything including VAT will be changed to GST and rate for this is fixed at 43%. So the same car with $ 100000 will first be taxed with 125% duties plus 43% so the costs will be 2,07 Cr

This is due to GST being charged on complete value i.e basic rates plus 125% customs unlike present sceneario where CVD gets charged only on basic rates. This is as per my understanding and I may be wrong so do clear this with your local dealer. They must have a clarity by now. Do update here as if this is correct then we can expect CBU to get even more expensive.
Attached Thumbnails
GST effect on car prices?-img_5916.png  


Last edited by Turbanator : 31st May 2017 at 09:23.
Turbanator is offline   (3) Thanks
Old 31st May 2017, 12:36   #244
BHPian
 
Join Date: Jan 2015
Location: Pothole Town
Posts: 518
Thanked: 356 Times
Re: GST effect on car prices?

I am attending a seminar on GST, meant wholly, exclusively and only for auto-makers (all kinds of vehicles) and spare parts manufacturers / vendors, which is going to be conducted tomorrow in Aurangabad (Maharashtra).

The questions all of them and all of us have, are going to be discussed and explained in detail, and we expect to get a more clear picture of the impact of this fuel named GST on that combustion chamber. Stay tuned.
Swapnil4585 is offline  
Old 31st May 2017, 12:59   #245
BANNED
 
Join Date: Dec 2007
Location: Gurugram
Posts: 7,969
Thanked: 4,786 Times
Re: GST effect on car prices?

Quote:
Originally Posted by vsun View Post
Technically Yes. But, If I book the vehicle now, the dealer may start pressurizing me to take delivery of the vehicle (I already got a confirmation from the dealer that the variant I opted is readily available in his stock yard).
Also, I am in no hurry since I have not yet sold my old vehicle (Mahindra Scorpio).
This sort of a thing happens when the taxation undergoes a change. in this case it is a massive change, so all the more.
sgiitk is offline  
Old 31st May 2017, 13:20   #246
BHPian
 
Join Date: Jan 2010
Location: New Delhi
Posts: 43
Thanked: 42 Times
Re: GST effect on car prices?

Calling the attention of business owners who purchase their cars in the company's name to take the benefit of depreciation & claim interest on loan as expense.

What would be the treatment of GST if you sell your current car?

In the current scenario, irrespective of the entity of the purchaser (individual/dealer/corporate), we just quote an all inclusive sum, say 1lakh.

In Delhi, VAT being 12.5%, we deposit this tax of approx. Rs.11,000/- with the relevant authorities.

So, after 1st July, for a large car like corolla or civic with engine > 1500cc, would this mean, we ll have to deposit 43% tax to the authorities, to almost like Rs.30,000/lakh?

Does it make sense to sell your car right now before 1st July if you're looking to sell it in a few months this year?
harshunlimited is offline  
Old 31st May 2017, 13:50   #247
Team-BHP Support
 
Turbanator's Avatar
 
Join Date: Mar 2011
Location: Gurgaon
Posts: 6,681
Thanked: 28,121 Times
Re: GST effect on car prices?

Quote:
What would be the treatment of GST if you sell your current car?
I don't think GST on the sales of old cars has been fixed at 43 % or if at all there is any notification on this.
Quote:
The questions all of them and all of us have
Perhaps Swapnil can make note of this as well on implication on CBU's.

Last edited by Turbanator : 31st May 2017 at 13:52.
Turbanator is offline  
Old 31st May 2017, 13:54   #248
BHPian
 
Porcupine's Avatar
 
Join Date: Apr 2017
Location: Mumbai
Posts: 588
Thanked: 1,257 Times
Re: GST effect on car prices?

Quote:
Originally Posted by Turbanator View Post
Hi,
I will try, under present scenario Car CBU are taxed with 125% Basic custom Duty plus 1% Landing charges plus 30% CVD and some additional cess of 3 and 4%.Thereafter Manufacturers invoices to Dealer on 2% CST and at time of invoice dealer charges VAT which vary from state to state at present. So for an example a car with a FOB value of $ 100000 present costs with no margins of manufacturer or dealer - just taxes will be 1,80 Cr INR including VAT

Under GST regime apart from basic custom duty of 125% rest everything including VAT will be changed to GST and rate for this is fixed at 43%. So the same car with $ 100000 will first be taxed with 125% duties plus 43% so the costs will be 2,07 Cr

This is due to GST being charged on complete value i.e basic rates plus 125% customs unlike present sceneario where CVD gets charged only on basic rates. This is as per my understanding and I may be wrong so do clear this with your local dealer. They must have a clarity by now. Do update here as if this is correct then we can expect CBU to get even more expensive.
According to that the costs other than import duty come to a total of 38%. So with GST at 43%, the total increase would be 5%, yes?
Porcupine is offline  
Old 31st May 2017, 14:04   #249
BHPian
 
Join Date: Mar 2010
Location: Bangalore
Posts: 278
Thanked: 44 Times
Re: GST effect on car prices?

Quote:
Originally Posted by sgiitk View Post
This sort of a thing happens when the taxation undergoes a change. in this case it is a massive change, so all the more.
In my case, it is the other way. I booked a Honda City on 15 Apr and expected delivery was supposed to be by 15 June. Now SA says it will get pushed to July ! Would that be a blessing in disguise for me as I will get some benefits of GST, post July 1 ?

Honda recently hiked ex-showroom price and the model I chose, crossed 10 lakhs. In Bangalore, that makes a big impact as the road tax increases from 14% to 17%. I would be more than happy to wait, if the ex-showroom price falls below 10 lakhs due to benefit of GST. (Current price is 10.13 lakhs). But there is no clarity..Nobody is able to give an answer. And Honda can choose not to pass any benefit to customers and enhance their profit margin. I am almost sure that Honda will choose not to offer any benefit to customers

Last edited by Revy : 31st May 2017 at 14:09.
Revy is offline  
Old 31st May 2017, 21:00   #250
BHPian
 
Join Date: Nov 2015
Location: Chennai
Posts: 188
Thanked: 395 Times
Re: GST effect on car prices?

Quote:
Originally Posted by Oxy View Post
Also, how is the GST going to impact small sedans like the recently launched Maruti Dzire?
The compact sedans like Dzire / Ameo / Aspire / Tigor / Amaze which are all sub 4 meter length with engine capacity not exceeding 1200cc(Petrol) / 1500cc(Diesel) would generally see a nominal reduction in tax by approx 2% after introduction of GST.
DImPo is offline  
Old 1st June 2017, 01:22   #251
BHPian
 
Shivjeet's Avatar
 
Join Date: Nov 2013
Location: Gurgaon
Posts: 153
Thanked: 688 Times

Quote:
Originally Posted by Turbanator View Post
Hi,
This is as per my understanding and I may be wrong so do clear this with your local dealer. They must have a clarity by now. Do update here as if this is correct then we can expect CBU to get even more expensive.

Thanks for your reply. I had a word with my dealer principal today, and was informed that I'll actually be paying .89 % less, so I have nothing to worry about now thankfully. Hoping for better clarity on this over time.
Shivjeet is offline   (1) Thanks
Old 1st June 2017, 07:35   #252
BHPian
 
vsun's Avatar
 
Join Date: Mar 2010
Location: Hyderabad
Posts: 130
Thanked: 109 Times
Re: GST effect on car prices?

Quote:
Originally Posted by Revy View Post
But there is no clarity..Nobody is able to give an answer. And Honda can choose not to pass any benefit to customers and enhance their profit margin. I am almost sure that Honda will choose not to offer any benefit to customers
Actually some news is coming that the cost of Honda City may be increased after GST.

Link to the news https://gaadiwaadi.com/gst-impact-ho...margin-894784/

Don't know how far it is true.
vsun is offline  
Old 1st June 2017, 12:07   #253
BANNED
 
Join Date: Mar 2013
Location: BBSR/Pune
Posts: 566
Thanked: 629 Times
Re: GST effect on car prices?

Quote:
Originally Posted by Revy View Post
But there is no clarity..Nobody is able to give an answer. And Honda can choose not to pass any benefit to customers and enhance their profit margin. I am almost sure that Honda will choose not to offer any benefit to customers
I read in some news report that there is a 'anti-profiteering measure' in GST, which directs the seller to pass on any input tax benefit to end user. I am not sure how it will work, GST gurus can help here.

Quote:
Originally Posted by vsun View Post
Actually some news is coming that the cost of Honda City may be increased after GST.

Link to the news https://gaadiwaadi.com/gst-impact-ho...margin-894784/

Don't know how far it is true.
I couldn't find how the price will be increased in the article, am I missing something? They have just put a statement that it would be more, but didn't say how.
PetrolRider is offline  
Old 1st June 2017, 15:44   #254
BHPian
 
vsun's Avatar
 
Join Date: Mar 2010
Location: Hyderabad
Posts: 130
Thanked: 109 Times
Re: GST effect on car prices?

Quote:
Originally Posted by PetrolRider View Post
I couldn't find how the price will be increased in the article, am I missing something? They have just put a statement that it would be more, but didn't say how.
Yes you are right. I too didn't found any supporting logic (The present tax structure on Honda City) mentioned, to support the statement that the price would be more.

Found the explanation for the prediction of price increase of Honda City in this article : http://www.outlookindia.com/website/...n-india/299014. But, this article is talking about the change in price of Honda City VMT Petrol in New Delhi only.
vsun is offline   (1) Thanks
Old 3rd June 2017, 21:18   #255
BHPian
 
Nohonking's Avatar
 
Join Date: Mar 2017
Location: UK-08 and HR-26
Posts: 196
Thanked: 774 Times
Re: GST effect on car prices?

The effect of GST has already started to show up:

I happened to visit Ford dealership today to check out the new Endeavour. Since this segment (ex-showroom: 25.5L / OTR: 29.91L) is expected to have lowered taxation under GST regime, so the dealership is offering an outright discount of 50K till 30th June.

Similarly, Mercedes dealership is offering discount as much as 3L as of today.

These discounts clearly show, the prospective buyers are holding back and waiting for GST for a better price while for dealerships it is important to ensure stock regularly keeps moving out of their stock yards. Certainly, these dealerships aren't really happy with GST coming in, atleast today.

Thanks,
Simmi

Last edited by Nohonking : 3rd June 2017 at 21:21.
Nohonking is offline  
Reply

Most Viewed
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Copyright ©2000 - 2024, Team-BHP.com
Proudly powered by E2E Networks