The government will be rolling out a new GST reform to ease the burden on the citizens, amidst growing inflation, soon
The new GST reform will potentially lead to a considerable reduction in the prices of vehicles in India. Now, we know that the festive season is upon us. This is the most auspicious time of the year for car buyers. Each year, carmakers experience a massive surge in demand and sales during this time frame. In fact, it is a great time for customers to buy all sorts of new products for their houses. The government wants to implement the GST rates before this, so that the customers and car companies can benefit immensely.
New GST Rates For Vehicles To Come Into Effect Soon
As per the latest reports, the GST council has planned to meet on September 3 and 4 to discuss the intricacies of this reform. Under this, there will now be two categories for GST application – Standard and Merit. These will bear taxes of 5 and 18 per cent, respectively. Until now, there were 4 slabs – 5, 12, 18, 28 per cent. Currently, cars and two-wheelers fall under the 28 per cent purview. Lowering this to 18 per cent could mark a significant reduction in the prices of these vehicles. It is expected that after the discussion, the implementation will take place in a few days. September 22 is being regarded as the date when it could come into effect.
In addition to this, the GST reforms are likely to bring down the prices of vehicle spare parts. As a result, the cost of servicing and maintenance could also become lower. This would make the overall running expenses of mass-market cars and two-wheelers more affordable. The government is aiming for a quick rollout of these changes. According to the Finance Ministry, the GST Council is expected to review the proposals in its next meeting. If approved, consumers may see reduced prices as early as the Diwali season this year.
My View
This move could play a major role in increasing sales and demand, not only in the auto industry but also in the wider economy. The point is important as the tariffs imposed by Donald Trump have caused some disruption in the Indian market. The new GST changes are expected to improve the ease of doing business and encourage trade for the MSME sector. As a result, a variety of goods and services may become more affordable and reachable for people. It now remains to be seen how the situation develops in the coming weeks.
Also Read: How Can Business Owners Save Massive Taxes on EVs?
