Big GST cut can increase the demand for small cars, hatchback is now likely to attract 18% tax compared to 28%

New Delhi: The proposed goods and services tax (GST) can be re -resumed in the market, which has been putting pressure for large vehicles like SUVs for some time during the increasing preference.The familiar people said that small trains are likely to be placed in 18% tax slabs, which will reduce the tax burden on them. Up to 1,200 cc (petrol, CNG and LPG) 4 meters and short lengths and engine capacity and small cars of low cars now attract 28% GST and 1% cess. Large cars and SUVs have to face a special rate of 40%, he said. Currently these vehicles attract 43-50% tax, including GST and Sess.

There will be no change in the GST rate of electric vehicles, there is currently 5%, the people said.

Prime Minister Narendra Modi on Friday announced the amendment of the eight -year indirect taxes in the Independence Day. “We are bringing the next generation of GST reforms. This will reduce the burden of taxes across the country. This will be a gift ahead of Diwali,” he said in his speech.

Two-slab design

Officers SAIDs said that the center has proposed a two-slab design, which retains a rate of 5% and 18% and charged 12% and 28%. A 40% special rate for six to seven items has been proposed, he said.

According to a proposal sent to the ministers (GOMs) on the rational of the GST Council before Modi’s speech, the daily used items are likely to be kept in 5% of the arc, while ambitious use for middle class and industrial goods will have to face 18% tax.

GOM will take the proposal this week, officials said. The final decision of the proposal will be taken by the GST Council, most likely, according to ET reports in the third ChiRD week of September. White items such as dishwasher and large television are also expected to be kept in 18% brackets, which is less than 28%, which can increase the demand for use.

Low
“If GST has a decline of 5%, the cost of former small motor showrooms will fall by 3-5.5 percent,” said VG Ramakrishnan, managing partner of unwanted Advisors. “Even if the perfect cut is in a range of Rs 20,000-25,000, it will be very positive on customers’ emotions.”

Demand is likely to increase at the highest affordable tip of the market due to tax reset. But with compact SUVs such as Hyundi Exterm and Tata Punch in the sub -4 -meter queue, this may not be limited to the optic hatchback section.

“Car buyers are ambitious today and they have access to the satisfaction of financing. And instead of some of the smaller hatches, SUVs are preferred to jump directly from a two-wheeler,” said the head of the Delhi-NCR chief’s automobile dealership. He said the total levy on small cars is -4-4-4%, he said. These include registration tax and insurance levied by GST, State Officer by.

The sale of compact cars and hatchbacks has been reduced by 13 percent in the financial year 25 to about one million units in the earlier year, according to the figures of the industry that entered the ET.

Shrinkage
SUV sales increased by 10.2% in the financial year 25. Overall, the share of small cars in the passenger vehicle market came down for the fifth year and the financial year 1 was reduced by 5.4.4%. In the first four months of the financial year, it came down to 21%, which has seen a total recession in car sales.

In the last five to six years due to strict safety and emission criteria, the industry giants have caused 30-40% to jump 30-40% at the price of low car.

In a dialogue this month, in a dialogue, Senior Executive Officer of Marketing and Sales, Partho Banerjee, said, “Entry-level customers cannot afford cars due to high prices.