[WorkingGuru]

In a market that's facing a slowdown, a rate cut will be seen as pro-industry move. At the same time if a consumer centric law against lemons is passed, it'll build confidence in the public that their rights are fairly protected.

Cross posting from the August '19 car sales thread :

Originally Posted by WorkingGuru

...Anyway, with the news about GST reduction etc, I'm optimistic about the auto-lobby reaching an agreement with the Govt. I'm sure the numbers post September will be great.

Why? Things aren't bipolar/rigid like earlier. If the auto sector wants a GST reduction, I'm guessing that the govt should possibly be negotiating with the auto-lobby with leverage of passing a stern consumer-centric law against car-makers selling lemons. Possibly detailed regulations for the warranty conditions.

Either the auto sector chooses that or they themself offer long term warranty (like Toyota offers for 7yrs) with either time based or usage based preconditions & Insurance deals etc (to tide thru the slowdown)...

Afterall, if BS-4 inventory worth ₹30-35,000 crore is to be exhausted before March 2020, Govt will get a substantial additional amount of GST revenues. So, IMO if govt balances it out with a pro-citizen law that builds confidence, reduction of GST rate isn't as impossible as people might think.

Reduction of GST rate is meaningless if Govt simply buckles under lobbyist pressure & a short term media narrative, without getting anything out of it.

[aniketi]

Request to government is not to budge against car manufacturer's. They have no right for this. When market was hot, they increased prices like anything and made big profits. Now when market is down by 15-20 % they need to make way out of it themselves and no need to beg to government for tax reductions or any package. They are trying emotional blackmail here and trying to get benefit of the situation right now in media and news. Car manufacturer's need to cut down their costs and make sure they survive this tough period which is not going to last very long. They should take this opportunity and introduce hybrid vehicles, better electric vehicles, improve existing portfolio, work on cons in existing cars, make face-lifts etc.

[nsbhagwat]

Originally Posted by aniketi

Request to government is not to budge against car manufacturer's.

The government wants to protect its revenue stream, so it may happen that the gst council may reduce the gst by a small margin.
But what really needs to happen is the elimination of tax on tax. That is one of the causes for prices going up.

[GrammarNazi]

Car makers incur 4-6% of revenue to all the jobs across the company. I'm guessing the factory labour cost won't be more than 4% of revenue.

When auto companies don't want to cushion such a small percentage for a few months that the going gets tough, then they don't deserve a GST cut of 10%.

I'd rather that the Govt keeps the GST at 28% and gives jobs under some govt scheme with the revenue collected.

Or instead cut GST penalties for MSMEs as these generate huge amount of employment & are severely distressed with being unable to cope with the constant changes in the GST system.

If GST is cut for Auto-Sector, it'll be an extremely unpopular move & it will have a cascading effect across other sectors and spur protests with increased non-compliance.

[condor]

States rule out cut in GST:

https://inwww.rediff.com/business/re...s/20190913.htm

[Hayek]

Frankly, the auto industry in India is subsidised enormously at the cost of the Indian customer. Yes it creates employment. But any industry which needs 60% import duties to exist and create employment does not deserve to exist. I am all for the government reducing GST on cars - and also capping road taxes at reasonable levels (in 2004, when I bought my Honda City, individual road tax in MH was 4% - it is now 12% for individuals and double that for companies). But all that will do is allow our inefficient auto manufacturers to make more money at the cost of customers (or let the efficient ones like Maruti keep milking us - Maruti has higher profit margins than even luxury car makers). So that be accompanied by an end to homologation requirements for cars certified in the EU, Japan, Korea or USA; and reducing customs duties to 10%. Let the India auto industry compete on a level playing field.

[stanjohn123]

I don't think Government will ever cut on GST and neither will manufacturers reduce their profit margins. People should realize that they are being taken for a royal ride and just stop buying car's altogether despite the juicy credit given to them.

[dadu]

I would have been happy to pay a higher GST if all the other areas were covered, Efficient public transport, free passage through highways (No toll), No Cess, No Surcharges.

Our taxes have become like the Air ticket booking where the taxes and surcharges are more than the base price of the product. This is becoming like money minting tax structure at the cost of the common mans hard earned money.

[sandhyab]

I remember when my parents bought their first couple of cars in 90's and early 2000, there used to be a tax benefit on offer as well, which is why they used to change cars every 4-5 years. If the government start doing that, won't that be a great booster to sales?? And the middle class salaried people will be more than willing to loosen their purse strings as well.

[SLK]

Issue closed, I guess. No rate cut for auto industry as per today's GST meet.

[84.monsoon]

https://www.thehindu.com/business/Ec...le29470694.ece

If I am reading this right, Seems like there is indeed a cut in aces rates for Diesel cars up to 1500 cc but more than 4 meters, from 20% to 12%

Similarly for Petrols over 1200cc but more than 4 meters from 15% cess to 12%

Should benefit the likes of Kia Seltos etc.

[SLK]

Originally Posted by 84.monsoon

https://www.thehindu.com/business/Ec...le29470694.ece

If I am reading this right, Seems like there is indeed a cut in aces rates for Diesel cars up to 1500 cc but more than 4 meters, from 20% to 12%

Similarly for Petrols over 1200cc but more than 4 meters from 15% cess to 12%

Should benefit the likes of Kia Seltos etc.

In fact you are right, there seems to be a change, but not all news articles seem to captured it.

As per https://economictimes.indiatimes.com...0.cms?from=mdr

Passenger vehicles of engine capacity 1,500 cc in case of diesel, 1,200 cc in case of petrol and length not exceeding 4,000 mm designed for carrying up to 9 persons attract compensation cess of 1 per cent for petrol and 3 per cent for diesel vehicle over and above the 28 per cent tax rate.

Council recommended same compensation cess rate for vehicles having these specifications (length and engine capacity) but designed for carrying more than 10 persons but up to 13 persons, she said adding presently these vehicles attract compensation cess at the rate of 15 per cent.

Read more at:
https://economictimes.indiatimes.com...0.cms?from=mdr

[gupta_chd]

Originally Posted by 84.monsoon

If I am reading this right, Seems like there is indeed a cut in aces rates for Diesel cars up to 1500 cc but more than 4 meters, from 20% to 12%

Similarly for Petrols over 1200cc but more than 4 meters from 15% cess to 12%

Should benefit the likes of Kia Seltos etc.

Nothing of such sort. There is some change only for some particular vehicles with carrying capacity of 10 to 13 passengers. I believe it would affect less than 0.1% vehicles.

[pogo0120]

Originally Posted by gupta_chd

Nothing of such sort. There is some change only for some particular vehicles with carrying capacity of 10 to 13 passengers. I believe it would affect less than 0.1% vehicles.

But the Hindu says this...
All these rate changes will be effective from October 1 2019.

>> GST Council recommends lower 12% cess on 1,500 cc diesel, 1,200 cc petrol vehicles with capacity to carry up to 13 people.

[knrn]

No cut in gst has been announced. Rather manufacturers like mahindra have hiked rates by 8-10000