In a landmark move towards simplifying the tax structure and easing the financial burden on citizens, Prime Minister Narendra Modi, in his Independence Day address this year, announced the next generation GST reforms. The new tax rates will be implemented from Monday. Today, we will take a look at the potential impact of these reforms on the automobile industry.
The GST Council on the 3rd of September, announced a series of Next Generation GST reforms, providing big relief to the citizens through significant tax reduction on the automobile sector. The government has cut down the tax on auto components used in the manufacturing of the majority of Motor cars and motorbikes to 18% from 28% GST slab. Under the new tax structure, the GST rates on Buses with seating capacity of upto 10 persons have been slashed to 18% from the previously taxed 28%. This move is set to make ticket prices affordable and encourage people to shift towards public transport, reducing congestion and pollution. Similarly, the GST on tractors upto 1800cc has also been reduced to 5% marking a significant step leading to push demand in both domestic and export segments. Talking to Media, a resident of Tamil Nadu, SVK Vinodh said that, due to reduction in the GST, the dream of middle-class families to buy their own vehicle has become a reality.
This rationalization under the next generation GST reforms has eased the financial burden on common man for their Vehicle purchases. The step is set to boost demand, increase the sale of vehicles and boost the nation’s economy. The new reforms will come into effect from Monday onwards.
