What Are You Lookig For?
Apart from the FASTag Annual Pass subscription, the government has made other announcements for the new car buyers in the country. This major announcement has been made to ease down the car buyer’s stress due to increasing prices! So, should you postpone your car buying plan? Let’s discuss –
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New GST Reforms – Car Prices To Be Reduced?
Prime Minister Narendra Modi’s recent speech at the Independence day caught some attention due to the new GST Reforms he mentioned. In particular, the announcement had something major for the automotive sector in the country. From long time, the car buyers were complaining of the hefty taxes imposed. However, the recent announcement seems to relieve car buyers from paying high taxes on small cars. So, what was the announcement and what is its impact?
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The Centre has now proposed to reduce the goods and service tax (GST) rates on entry-level two-wheelers, small cars in the country. At present, the whole set of mass markets including small and big cars and utility vehicles attract similar kinds of GST in the country. However, now to provide a relief to middle-class buyers, the government is substantially proposing to bring down the GST rates from 28 percent to 18 percent for small cars and entry level bikes.
Which Cars Will Cost Cheaper? And From When?
The proposed changes in the GST rates are expected to be changed in the coming two months. That said, someone planning to buy a new car this diwali would see some reduction in the price of models. Talking about the key proposals that are under consideration includes –
- Small Cars (Below 1200cc petrol engine capacity, 1500cc Diesel engine capacity, and up to 4m length) – the GST of 28 percent + cess ranging from 29-31 percent, now will be reduced to 18 percent flat.
- Two Wheelers (Below 350cc engine capacity) – New GST rates to be 18 percent down from 28 percent (current)
- Other Passenger Vehicles (Big cars, Luxury cars) – Proposed to be put under the highest bracket of 40 percent.
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Road Ahead
At present, the government is looking to increase the buying power of the citizens by reducing the GST rates substantially. Once implemented, it could be one of the biggest overhauls in GST since the rollout. The reforms are expected to be finalized by this Diwali.
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