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Old 29th January 2018, 12:48   #1
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Default Spare part prices go down, thanks to GST

I recently visited Nippon Toyota, Trivandrum for the 1st service of my Innova Crysta and saw a banner which shows the difference in pricing of spare parts pre and post GST implementation. The net price ( including tax ) seems to have come down after the implementation of GST. Have anyone of you noticed this difference when you serviced your car ?

PS: I didn't do any paid service on my old car ( Etios ) after the GST implementation and hence was not able to validate this.

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Old 30th January 2018, 09:34   #2
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Default Re: Spare part prices go down, thanks to GST

Agreed Sir.. there has been a slight reduction in the spare parts, but at the same time labor attracts 28% GST.. making the overall costs go higher.
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Old 30th January 2018, 10:04   #3
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Default Re: Spare part prices go down, thanks to GST

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Originally Posted by panky12345 View Post
Agreed Sir.. there has been a slight reduction in the spare parts, but at the same time labor attracts 28% GST.. making the overall costs go higher.
Are you sure about the 28% figure. I can see a very recent bill in team-bhp added on January 2018 which shows the labour GST at 18%.

Spare part prices go down, thanks to GST-screen-shot-20180130-10.03.30-am.png
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Old 30th January 2018, 10:29   #4
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Default Re: Spare part prices go down, thanks to GST

Surprising. I recently got my Dzire serviced from MASS and was charged a whopping 28% on labor amount. I don't have a copy right now but will find it and surely upload here.
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Old 30th January 2018, 10:54   #5
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Default Re: Spare part prices go down, thanks to GST

Quote:
Originally Posted by amalji View Post
...shows the labour GST at 18%.
Sharing an excerpt of the bill (service done in September 2017) :

Spare part prices go down, thanks to GST-screenshot_2018013010475001.jpeg

Labour : 9% CGST + 9% SGST
Spares : 14% CGST + 14% SGST
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Old 30th January 2018, 11:34   #6
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What is this concept of State GST and central GST. Why not a single entity called GST? At least that's how it is calculated here in Australia. Seems like that the tax amount is at least one-third of the goods price
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Old 30th January 2018, 11:50   #7
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Default Re: Spare part prices go down, thanks to GST

Not sure about cars' spare parts prices, but I rebuilt my motorcycle last week and spare parts' prices have increased post GST.
Clutch kit was up by 112 rupees, timing chain was up by 30 rupees, brake pads were up by 20 rupees, sprocket kit was up by 90 rupees and so on.
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Old 30th January 2018, 11:51   #8
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Default Re: Spare part prices go down, thanks to GST

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Originally Posted by arunramaswamy View Post
What is this concept of State GST and central GST. Why not a single entity called GST? At least that's how it is calculated here in Australia. Seems like that the tax amount is at least one-third of the goods price
That's the 50% loot sharing between the State and the Centre - 28% on labor is atrocious and considering if we pay it from the highest tax bracket (33%) becomes 61% in taxes alone - daylight robbery!
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Old 30th January 2018, 12:05   #9
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Default Re: Spare part prices go down, thanks to GST

The labour cost attracts 18% GST having SAC code 998714, whereas GST on parts depends on type of parts. For eg. aircon parts (AC filter etc) attract 28% having HSN 8415. Oil filter, fuel filter come under 18% tax.

I recently got my car serviced. The same car was also serviced year back. Will check both the bills and post the difference in cost here.
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Old 30th January 2018, 13:39   #10
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Default Re: Spare part prices go down, thanks to GST

Before the GST, the spare parts were charged excise duty (12.5%) as well as VAT (14.5%). The Excise duty was based on MRP of the product (with a % of abatement) while the VAT was charged on the sum of selling price and excise duty. There maybe other cess, local taxes, which I am ignoring for the sake of convenience.

As per the GST rates, automobile spare parts are majority charged at 28%, while some are at 18%. Here are some of them that I came across:
8708 - Parts and accessories of the motor vehicles of headings 8701 to 8705 – 14+14 = 28%
4008 / 4009 – Rubber hoses – 9+9 = 18%
7318 – screws, nuts and bolts – 9+9 = 18%

Again, for simplicity, I will assume a tax rate of 28% on all the spare parts. The tax rate for parts for agricultural vehicles like tractors is even lower.


Now, consider a part with MRP of Rs. 2000. It is sold by manufacturer to the service centre for Rs 1000. Below table should clear up something on how parts were taxed before and after GST (Do note that this is just for the sake of understanding as there might be changes in tax rates for different products):
Spare part prices go down, thanks to GST-screen-shot-20180130-1.21.10-pm.png

So, there is a saving of Rs. 81 on a part worth 1000. Labour rates are at 18% under GST, an increase of 3% from the earlier service tax of 15%. However, this increase is compensated by the savings on parts.

Other points:
30% Abatement means that excise duty is charged on 70% of MRP.
In GST, there is a provision for discount, so you end up paying GST only on the final price and not MRP like before.
Input tax credit can be availed incase of company registration of cars on services and labour.

Last edited by blackwasp : 30th January 2018 at 13:40.
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Old 31st January 2018, 02:05   #11
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Thank you blackwasp for the post. I now have a fair bit of understanding how things work. But what I still don't get is why are we being taxed on labour? Labour is like paying the service centre guys for their physical work. Why should that be taxed? I am not sure if handicrafts or carpentry items are taxed separately for labour. Just don't understand this.
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Old 31st January 2018, 13:32   #12
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Default Re: Spare part prices go down, thanks to GST

Quote:
Originally Posted by arunramaswamy View Post
Thank you blackwasp for the post. I now have a fair bit of understanding how things work. But what I still don't get is why are we being taxed on labour? Labour is like paying the service centre guys for their physical work. Why should that be taxed? I am not sure if handicrafts or carpentry items are taxed separately for labour. Just don't understand this.
Because labor charged is a service provided just like your insurance cover , Telephone Bill , charges of your bank or the hired janitorial service in your office. Services are under tax net since 1994 when Manmohan Singh introduced it for first time.

Around 54% of Economy of India is service based and the logic of taxing services is that the taxation should be neutral to the activity performed. Initially to keep the shock minimal the service tax started with 5% but kept on increasing to bring it in line with tax charged on goods and before introduction of GST it was 15%

The whole objective of Goods and Service Tax ( GST) is to bring a uniform tax rate on everything. But seeing the reality of our economy and politics there are several exemptions ( 0% ) and 4 tax slabs today.

The ultimate stated objective is to bring a uniform single tax. May be in couple of decades we can reach that state when we can have only two slabs 0% and X%.

Some political parties in opposition are making polite noise about a uniform tax rate but no government can afford to bring food and other items currently in 5% and 12% bracket to uniform rate of 18%. At the same time they can not afford to lower overall tax rate to lowest 5% seeing the low tax base. The process of reduction of tax slabs will take years /decades.
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Old 6th February 2018, 08:18   #13
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Default Re: Spare part prices go down, thanks to GST

I wanted to buy Brake Caliper Pins (Guide Rod) and their corresponding rubber boots for Elite i20.
When I enquired the price at Dealer as well as Hyundai Authorised Spare Parts Outlet in Solapur, both gave me prices as below-
1) Rod Assy-Guide (B)- 58162-2F3000 = Rs. 457/-
2) Boot-Guide Rod- 58164-2E000 = Rs. 952/-

Even Boodmo shows prices- Rs. 352/- Discounted Price- Rs. 335/- and 932/- respectively for above parts.

IIRC, I had seen the Boot Price of Rs. 23/- or Rs. 32/- on Boodmo before last Diwali.
Mind you, all the prices quoted above are for single piece.

How is that the Boot Price increased on Boodmo that too nearly 30 times?

The Packet of Boot (1 No.) has MRP of Rs. 215/- Packed date 2011 is available at Hyundai Spares Outlet but he is selling it for Rs. 932/- saying even he is billed Rs. 932/- by Hyundai.

How can he sell the item for nearly 4 times of MRP?


EDIT-
The Part numbers given above are actually of Old i20 but our Elite i20 bought in March 2015 has these Caliper Pins and not the Caliper Pins of Current Elite i20. Hyundai as well as Boodmo shows different part Nos. (and different parts too) for Old i20 and Elite i20.

Even the above Dealer and Spares Parts Outlet were surprised when I told that our Elite i20 does not have sleeve and Fixed Pin.

The link below show Elite i20 parts as per Dealer, Spare Parts Outlet, and Boodmo-
Elite i20

The link below show Old i20 parts as per Dealer, Spare Parts Outlet, and Boodmo (and our Elite i20 comes with these parts)-
Old i20 1.4 Ltr Engine

Just now noticed that the Old i20 with 1.2 Ltr Petrol Engine has these Fixed Pin and Sleeve but not 1.4 Ltr Petrol or Diesel.

Bhpians, please help me source the Guide Rods (B) at less price.

Last edited by IndigoXLGrandDi : 6th February 2018 at 08:32.
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