[John]

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

http://https://news.google.com/artic...N&ceid=IN%3Aen

[chittybang]

So what happens now? What would be the reaction from manufacturers? Will they lower margins and offer better discounts? I have a feeling it's just going to be more of the same that's been going on. Would love to be a fly on the wall of those meetings that take the final call on this.

[Vid6639]

Can someone confirm if the CESS which was on top of GST has really been reduced?

In which case, Venue, Seltos might benefit vs Hector and Harrier.

[jaaz]

Carrying capacity of 10 to 13 passengers and the vehicle should be less than 4 metres. I guess only mini vans used in rural areas qualify. Or the ones carrying school children in urban areas.

And, the government is concerned about our lives.

It’ll take couple of days, before the proposals are notified. Till then, we cannot interpret the statements issued to the press. It needs legal vetting.

[Turbanator]

^^
Chill out guys, there is no change. They have just removed the anomaly of different cess on larger seating vehicles with same dimensions and engine as with less seats.

Manufacturers may reduce the prices or increase discounts due to reduction in their Income tax liability but this may take some time.

[gupta_chd]

Originally Posted by pogo0120

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.

The extract statement is 10-13 people and not up to 13 people. Lot of publications are reporting it wrong.

[Hayek]

Get amazed that there can be a legal vehicle which is less than 4 metres long, has an underpowered 1.2 l engine, and carried 10-14 passengers (900 kg of Passenger weight + 10000 kg of unladen vehicle weight = ~ 2 tons GVw). Just shows what a joke our vehicle safety regulations are.

[dadu]

Originally Posted by Hayek

Get amazed that there can be a legal vehicle which is less than 4 metres long, has an underpowered 1.2 l engine, and carried 10-14 passengers (900 kg of Passenger weight + 10000 kg of unladen vehicle weight = ~ 2 tons GVw). Just shows what a joke our vehicle safety regulations are.

Its a reverse calculation to how much revenue will get lost, so this will impact very few categories of cars, IMO.

[sgiitk]

I hear the States were no in favour of a GST cut. The cess & surcharge go to the Centre, so this is why it is being changed.

However, after yesterday one really does not know. I heard of a chap who made over 7L out of the NIFTY futures.

[84.monsoon]

Originally Posted by Turbanator

^^

Manufacturers may reduce the prices or increase discounts due to reduction in their Income tax liability but this may take some time.

The problem here is very few manufacturers make profits in India. The question of tax and tax cuts arises only when the company is making profits. Except Maruti, Hyundai, Toyota and M&M, I don’t suppose any of the others are making real profits from passenger vehicles that they can then save tax on, leave along passing on these tax benefits to consumers. I think Renault, Nissan, Ford, FCA, VW, Skoda, Tata Motors etc. are all losing money on domestic passenger car business and therefore anyway not paying any corporate tax.

[Turbanator]

Originally Posted by 84.monsoon

The problem here is very few manufacturers make profits in India.

Correct, I got this forward.

Amazing country! Amazing people!
Corporate tax 22%, Individuals tax 35%
&
Individuals are celebrating!

I went to a Toyota dealership this morning at Chandigarh and in my whole life, I have not seen so many Toyota brand new vehicles, mostly Innova's and Fortuners and plenty of Lexus parked everywhere in the complex. I won't be surprised if the retails numbers are even lower than factory sales data that manufacturers report. Had they tinkered with Taxes for normal guys, I am sure results would have been different. As someone rightly said here, this exercise of reduction of corporate taxes will make rich guys even richer.

[sandhyab]

Originally Posted by Vid6639

Can someone confirm if the CESS which was on top of GST has really been reduced?

In which case, Venue, Seltos might benefit vs Hector and Harrier.

Just to understand, why will the same benefit be not applicable to hector/harrier??

[coolkurt]

Originally Posted by sandhyab

Just to understand, why will the same benefit be not applicable to hector/harrier??

The changes are limited to 1500cc diesel and 1200cc petrol cars.

[KMT]

Originally Posted by Turbanator

Correct, I got this forward.

Amazing country! Amazing people!
Corporate tax 22%, Individuals tax 35%
&
Individuals are celebrating!

Had they tinkered with Taxes for normal guys, I am sure results would have been different. As someone rightly said here, this exercise of reduction of corporate taxes will make rich guys even richer.

Very correct observation Turbanator.
Even I am scratching my head as to what the FM is thinking.

She wants to kick start the economy and goes on to reduce Corporate taxes.

This will generate employment and investment in say 3-5 years time.

If we need to get people confident about spending TODAY, make them feel a bit more financially secure and prosperous TODAY.

She could have streamlined GST slabs, reduced personal tax rates (even temporarily), spent big on Govt infrastructure projects to employ labour class, offered MSP for farmers etc etc.

This is just basic Economics.

This is the third try she has had at getting the Budget right this year, I am sure she will have to have anothet go before this FY is over.

Ideally we need an FM who has real world experience in Economics and Finance.

[locusjag]

Originally Posted by KMT

This will generate employment and investment in say 3-5 years time.

If we need to get people confident about spending TODAY, make them feel a bit more financially secure and prosperous TODAY.

Thankfully, you've at least mentioned employment generation, as opposed to discretionary spending by consumers. So it becomes a tad easier to point out that yes, this is about all those jobs which were lost in the recent 2 years (unemployment figures have touched a 45 year high).

It makes sense to nourish the hand that feeds many mouths than to feed a few mouths. An unemployed person has no use for personal income tax cuts. An employer who has laid off workers has no use for it either, nor will he be able to take back any of those who were laid off.

Ideally we need an FM who has real world experience in Economics and Finance.

Ahem. Not that trope again; we had some supposedly world-class economists in the previous socialist dispensation when faltering GDP growth was the norm and absolutely no steps were taken. We ambled along and lost a solid decade to paralysis.

Look, I hate to debate politics here in this forum. But we ought to be careful when bringing in economics of the WhatsApp University curriculum. I'd reckon that I'm as ignorant as any of my fellow countrymen in these matters, but if I understand anything - it is our history and facts. And that's all I've sought to touch upon here. I don't have a dog in this fight beyond this point and would angrily vote out this government if they flounder in the course of time.