GST Rates On Automobiles To Be Reduced To Boost Sales In Auto Sector

The GST rates on automobiles is soon set to drop. Finance Minister Nirmala Sitharaman has indicated that the government is considering the reduction of GST on automobiles. The government may have arrived at this decision in order to boost sales in the automotive industry that is currently seeing a slump in sales.

GST Rates On Automobiles To Be Reduced To Boost Sales In Auto Sector

The Indian automotive sector has witnessed a slowdown in terms of sales. Almost every automotive manufacturer is posting a drop in sales figures. This could be blamed on many reasons, including weak buyer sentiment, increasing costs of purchase and the government's push towards electric mobility.

GST Rates On Automobiles To Be Reduced To Boost Sales In Auto Sector

It is an obvious fact that there is a slowdown in the Industry and the government too is aware of it. It was only a few days ago that the government announced its decision to purchase new cars.

For a long time, there was a ban on government departments spending money on the purchase of new cars to replace existing cars in the department. In order to help increase sales of the automotive industry, that ban was lifted recently.

GST Rates On Automobiles To Be Reduced To Boost Sales In Auto Sector

Now, Finance Minister Nirmala Sitharaman has indicated that GST on automobiles could be reduced. The government in its push towards electric mobility had reduced the GST on electric vehicles from 12 percent to 5 percent earlier this year.

However, petrol, diesel, LPG/CNG-powered vehicles all come under the 28 percent GST slab and that pushes up prices considerably. The government believes that lower prices might draw more people to buy vehicles and hence is considering the reduction of GST on automobiles.

GST Rates On Automobiles To Be Reduced To Boost Sales In Auto Sector

She was quoted as saying that the government has recommended the GSt council to cut tax rates on automobiles. It appears that the ball is in the court of the GST council.

The Finance Minister was quoted as saying, "The government has been in consultation with a lot of sectors and we are listening to their inputs. Several steps have already been taken including steps to enhance liquidity and lending in the market to boost the demand in the automotive sector."

GST Rates On Automobiles To Be Reduced To Boost Sales In Auto Sector

Thoughts On Government's Consideration Of Reduction In GST Rates For Automobiles

It was on 01 July, 2017 that the Indian government introduced GST (Goods & Services Tax) in India. New tax slabs were set for various segments and the automotive industry came under the highest slab of 28 percent.

While we cannot really blame the high GST rates for the slowdown in the auto industry, we certainly can say that it may help boost sales by just a bit, thereby helping the entire industry to recover.

Most Read Articles

English
Read more on: #auto news
Article Published On: Monday, September 2, 2019, 16:09 [IST]
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Drivespark sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Drivespark website. However, you can change your cookie settings at any time. Learn more