What is GST?
GST stands for Goods and Services tax, is a uniform indirect tax levied on the consumption and sales of goods and services throughout the country. GST is a reform in the tax that is imposed when a person buys any good or service. It will take the place of all multi-stage taxes in the country imposed by the states and the centre.
Which taxes are going to die when GST will come?
Different types of taxes are imposed by the state government and the central government on the goods and services. The main taxes are service tax, income tax, central value added tax (CENVAT), excise duty, entertainment tax and security transaction tax.
Where we stand in implementing GST?
It was expected to get GST implemented from April 1, 2017, but it got stuck in the Rajya Sabha and waiting for the approval. GST is back in the market with a hope of its approval in the monsoon session of parliament. If it will get through the monsoon session, it is expected to come into an effect from next year.
If GST will get implanted in India, there will only be a single tax and the taxation on goods and services will get easier.
What is for Auto market?
The auto industry of the country will be getting most of the benefits. The market is expecting a GST of 18%. Here are the key effects of implementation of GST:
- The prices of small cars having engine size less than 1500 cc and the length less than 4 meters will come down by 7 per cent as GST is likely to be at 18 per cent of the ex-showroom price of the cars. Currently, it is 24 per cent. The cars getting benefits will be Tata Tiago, Maruti Suzuki Swift, Celerio, Ritz, Alto, Hyundai Grand i10, Ford Figo, Datsun Go, Chevrolet Beat, and much more.
- The price of medium size cars having the size of engine less than 1500 cc and length more than 4 meters is expected to increase by 6 per cent. The GST will be around 40 per cent for this segment that is currently 34 per cent.
- The large cars having engine size more than 1500 cc will not get affected as the GST will remain at 30 per cent. So, the price will not change.
It concludes that India’s leading carmaker Maruti Suzuki will be getting positive effects of GST implementation as they have most of the cars falling into the first category. So, if you are planning to buy a car in the coming days, analyse the GST effects and choose then. If you are planning for a mid-sized car like Baleno or Elite 20, it’s better not to postpone your decision for the next year.
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