Central government The current GST system is going to make many major improvements, which are being described as ‘GST of the next generation’. The central government has proposed only two tax slabs with 5 percent and 18 percent in the revised system of GST, which is expected to be implemented by Deepawali this year. The current slab of 12 and 28 percent has been removed in the Center’s proposal. If this proposal of the government passes and comes into force, then it can directly fall in the prices of entry level cars and motorcycles by 10 percent.
All entry level vehicles can be cheaper
After the new GST system is implemented, all the entry level vehicles will become cheaper. Currently, 28 percent GST is charged on trains. Depending on the engines and other things of trains, compensation cess of 1 to 22 percent is also taken in addition to GST. The total tax load on cars based on engine capacity and length of trains is 29 percent for small petrol cars and up to 50 percent for SUVs (Sports Utility Vehicle). Electric vehicles have 5 percent GST.
Entry level vehicles are expected to be kept in 18 percent slab
Sources said that the GST system is proposed to be kept in a two-level rate structure of 5 and 18 percent and 40 percent for select items. In this, entry level vehicles can be kept in 18 percent. In addition, motorcycles up to 350 cc can also be placed in 18 percent GST slab, which are currently in 28 percent slab. Lowering GST on small trains will increase both their demand and sales, as cars will become cheaper. This will also increase consumption, which is a major idea of GST reform proposed by the Center.
These cars will become cheaper
If the new GST system is implemented, then all the small cars like Alto, WagonR, Swift, Baleno, Tata Tiego, Panch, Altroz, Tigor, Hyundai i10, i20, Exterited can be cheaper. In addition to 5 percent and 18 percent tax slab in the revised GST system, it is proposed to keep a special tax slab of 40 percent for luxury and harmful items. Under this, large and expensive cars as well as motorcycles can also be placed in a 40 percent GST slab.
Latest business news
