GST effect on auto: Here – s what will become expensive and what will get cheaper – The Financial Express
GST effect on auto: Here’s what will become expensive and what will get cheaper
There is a lot of confusion right now on how much various things will cost after implementation of GST (Goods and Services Tax) and automobiles are one of them. Various manufacturers are suggesting pre-GST discounts but some aren’t. This creates confusion for a potential buyer as to which vehicles will get cheaper and which ones won’t. While the GST proposal seems beneficial largely, puny cars aren’t going to witness much of a switch in prices after GST, while luxury cars will get cheaper. In order to clear the confusion and help you determine on whether to buy right now or wait, here’s a accomplish break-up of what the upcoming GST structure holds for each category in the automotive sector.
The classification of two-wheelers has been done in two types, those with the engine capacity of less than three hundred fifty cc and those with greater than three hundred fifty cc. A total of 30.Two percent tax, which includes Excise Duty at 12.Five percent, NCCD at one percent (National Calamity Contingency Duty), VAT at 12.Five percent (Value Added Tax) and CST two percent (Central Sales Tax) brings the total tax rate to 30.Two percent. After the implementation of GST, two-wheelers under three hundred fifty cc would incur a tax of twenty eight percent while those higher than three hundred fifty cc would be subjected to around thirty one percent tax. So, while a Royal Enfield Classic three hundred fifty would cost less, a Classic five hundred might become more expensive. That said, the difference in the fresh tax scheme would not be significant and hence will not affect the buying sentiment of the sector in the long-run.
The commercial vehicle category is classified into two parts, commercial vehicles and three-wheelers. The tax structure before the implementation of GST officially includes 12.Five percent Excise Duty, one percent NCCD, 12.Five percent VAT and two percent CST bringing it to a total of 30.Two percent for the commercial vehicle category. Three-wheelers are not taxed for NCCD, which means a total of 29.Two percent tax is levied on them. With the implementation of GST, a fresh category for buses which can ferry up to thirteen passengers would also be introduced. The fresh tax structure would mean that commercial vehicles would see a petite dip of Two.Two percent from 30.Two percent to twenty eight percent. Three-wheelers would witness a slight reduction of 1.1 percent from 29.1 percent to twenty eight percent.
The fresh category of buses that can ferry up inbetween ten and thirteen passengers incurs a total effective tax of 30.Two percent right now and will now witness a considerable leap with the fresh tax structure to forty three percent. Overall, the commercial vehicle sector will stay unaffected and potential buyers of buses with blast carrying capacity of ten to thirteen passengers would see a considerable rise of 12.8 percent tax.
This category has the most number of segregations based on length of a vehicle as well as engine capacity. The pre-GST tax structure included Excise Duty, NCCD, Infra Cess, CST and VAT. However, with the fresh tax structure implementation, it would only be GST and extra cess based on the vehicle’s segment.
Sub-4 metre petrol cars, which were taxed at about thirty one percent would incur twenty nine percent tax, while their diesel counterparts would incur thirty one percent after the implementation of GST as opposed to harshly thirty three percent. This would translate into a petite switch for the puny car buyer, which won’t have any influence on the overall buying mood of consumers across the country.
Mid-sized cars that are above four metres in length but less than 1,500 cc in engine capacity, as well as cars with more than 1,500 cc engine capacity, will witness a considerable dip. While the former is taxed at 46.6 percent and the latter at 51.8 percent, the revised tax structure would enable these cars to be taxed at forty three percent. The case for SUVs is also similar as they would incur a tax of forty three percent compared to the 55.Three percent right now, translating into a drop of 12.Trio percent. Certain manufacturers including luxury carmakers such as BMW and Audi as well as Utility vehicle only manufacturers such as Isuzu have already began to pass the benefits of GST to potential customers. The only segment here which would witness a considerable rise in taxes is hybrid cars, wherein after including Excise Duty, Infra Cess, NCCD, CST and VAT the total figure came to about thirty percent. Now, with the implementation of GST, these cars would incur forty three percent tax, which is considerably higher.
GST effect on auto: Here – s what will become expensive and what will get cheaper – The Financial Express
GST effect on auto: Here’s what will become expensive and what will get cheaper
There is a lot of confusion right now on how much various things will cost after implementation of GST (Goods and Services Tax) and automobiles are one of them. Various manufacturers are suggesting pre-GST discounts but some aren’t. This creates confusion for a potential buyer as to which vehicles will get cheaper and which ones won’t. While the GST proposal seems beneficial largely, petite cars aren’t going to witness much of a switch in prices after GST, while luxury cars will get cheaper. In order to clear the confusion and help you determine on whether to buy right now or wait, here’s a finish break-up of what the upcoming GST structure holds for each category in the automotive sector.
The classification of two-wheelers has been done in two types, those with the engine capacity of less than three hundred fifty cc and those with greater than three hundred fifty cc. A total of 30.Two percent tax, which includes Excise Duty at 12.Five percent, NCCD at one percent (National Calamity Contingency Duty), VAT at 12.Five percent (Value Added Tax) and CST two percent (Central Sales Tax) brings the total tax rate to 30.Two percent. After the implementation of GST, two-wheelers under three hundred fifty cc would incur a tax of twenty eight percent while those higher than three hundred fifty cc would be subjected to around thirty one percent tax. So, while a Royal Enfield Classic three hundred fifty would cost less, a Classic five hundred might become more expensive. That said, the difference in the fresh tax scheme would not be significant and hence will not affect the buying sentiment of the sector in the long-run.
The commercial vehicle category is classified into two parts, commercial vehicles and three-wheelers. The tax structure before the implementation of GST officially includes 12.Five percent Excise Duty, one percent NCCD, 12.Five percent VAT and two percent CST bringing it to a total of 30.Two percent for the commercial vehicle category. Three-wheelers are not taxed for NCCD, which means a total of 29.Two percent tax is levied on them. With the implementation of GST, a fresh category for buses which can ferry up to thirteen passengers would also be introduced. The fresh tax structure would mean that commercial vehicles would see a puny dip of Two.Two percent from 30.Two percent to twenty eight percent. Three-wheelers would witness a slight reduction of 1.1 percent from 29.1 percent to twenty eight percent.
The fresh category of buses that can ferry up inbetween ten and thirteen passengers incurs a total effective tax of 30.Two percent right now and will now witness a considerable hop with the fresh tax structure to forty three percent. Overall, the commercial vehicle sector will stay unaffected and potential buyers of buses with fountain carrying capacity of ten to thirteen passengers would see a considerable rise of 12.8 percent tax.
This category has the most number of segregations based on length of a vehicle as well as engine capacity. The pre-GST tax structure included Excise Duty, NCCD, Infra Cess, CST and VAT. However, with the fresh tax structure implementation, it would only be GST and extra cess based on the vehicle’s segment.
Sub-4 metre petrol cars, which were taxed at about thirty one percent would incur twenty nine percent tax, while their diesel counterparts would incur thirty one percent after the implementation of GST as opposed to harshly thirty three percent. This would translate into a puny switch for the petite car buyer, which won’t have any influence on the overall buying mood of consumers across the country.
Mid-sized cars that are above four metres in length but less than 1,500 cc in engine capacity, as well as cars with more than 1,500 cc engine capacity, will witness a considerable dip. While the former is taxed at 46.6 percent and the latter at 51.8 percent, the revised tax structure would enable these cars to be taxed at forty three percent. The case for SUVs is also similar as they would incur a tax of forty three percent compared to the 55.Three percent right now, translating into a drop of 12.Three percent. Certain manufacturers including luxury carmakers such as BMW and Audi as well as Utility vehicle only manufacturers such as Isuzu have already began to pass the benefits of GST to potential customers. The only segment here which would witness a considerable rise in taxes is hybrid cars, wherein after including Excise Duty, Infra Cess, NCCD, CST and VAT the total figure came to about thirty percent. Now, with the implementation of GST, these cars would incur forty three percent tax, which is considerably higher.