Customers ecstatic about price cut

Rujuta Parekh
Wednesday, 5 July 2017

Discontent over govt’s decision to levy additional 2 pc on vehicle’s registration

Pune: The roll out of Goods and Services Tax (GST) has had a positive impact on the automobile industry ensuring a price reduction across nearly all segments of personal vehicles. In light of the benefits available to the industry, automobile manufacturers have put the right foot forward to ensure that the benefits are passed on to the consumers.

Additional tax
While on one hand consumers are ecstatic about the price reduction in the automobile sector, they have expressed discontent over Maharashtra government’s decision to levy an additional two per cent tax on registration of vehicles.

Sahil Shah, a city-based businessman, who is set to purchase a new car, said, “I was waiting for GST to be implemented as I knew that the prices of vehicles were going to come down. I am planning to buy a Maruti Baleno which has been a three per cent price reduction post-GST.”

“However, the additional two per cent tax on vehicle registration off-sets the difference, bringing no benefit to the consumer.  While GST has simplified the tax structure in the country, we cannot say that it has succeeded in bringing down prices of commodities. These additional taxes being levied by the government to compensate for losses due to GST is creating a burden on consumers,” he added.  

Passing the benefits
Luxury car manufacturer Mercedes-Benz India was among the first to announce passing on GST benefits to consumers even before the roll out of GST on all the nine ‘Make in India’ models available in the country.
Renault, on Wednesday, announced that it will pass on the benefits of GST rates on its vehicles to the customers. “With this, customers will stand to benefit up to seven per cent. The price change will vary depending on the state, model and the variant purchased, basis the tax rates applicable prior to GST,” authorities at Renault stated.

Country CEO and MD for Renault India Operations, Sumit Sawhney said, “The rollout of GST from July 1, is one of the biggest achievements of the government, facilitating a ‘one nation-one tax’ system, aimed at fostering a congenial business environment. Reflecting our customer-first approach, we have decided to pass on GST benefits to our customers, further enhancing the value proposition of our products.”

Commenting on the price reduction, President, Passenger Vehicles Business Unit, Tata Motors, Mayank Pareek said, “Following the rollout of GST, we have decided to pass on the entire benefit to our customers. We are offering a price reduction of up to 12 per cent ranging between Rs 3,300 and Rs 2,17,000 depending on the model and variant. With a strong focus to encourage positive buying sentiments, we have taken this step.”

Toyota Kirloskar Motor too has revised prices, reducing it up to 13 per cent effective from July 1. Expressing his views on the post GST price, Director  and Sr Vice President, Marketing and Sales, Toyota Kirloskar Motor, N Raja said, “With the roll-out of GST, the approximate price decrease in Bengaluru for Innova Crysta will be up to Rs 98,500, Fortuner up to Rs 2,17,000, Corolla Altis will witness a price dip up to Rs 92,500, Platinum Etios prices reduced up to Rs 24,500 and Etios Liva up to Rs 10,500.”

Highest tax bracket

 Cars have been included in the 28 per cent bracket under GST while luxury cars will also see an additional cess.
 However, despite being placed in the highest tax bracket, the taxes levied on automobiles have reduced leading to a price cut.

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