Touted as one of the biggest tax reform of our times, the GST ( Goods and Service Tax Act) has cleared the first hurdle as it gets the approval from Rajya Sabha, the upper house of the Parliament. The GST tax structure aims at eliminating different taxes on a product and implement a single tax, called the GST. The GST will directly affect automobile industry too.
As of now, the small cars (less than 1200cc) were attracting a tax figure of 28.1% and the mid-range cars (1200-1500 cc) were attracting a higher figure of 39.1%. As proposed, after the implementation of the GST, the tax levied on the small and medium cars would come down to 18%, a healthy 10 and 215 drop over the current numbers.
Mr. Sumit Sawhney, Country CEO and Managing Director, Renault India Operations said - "GST is the greatest tax reform ever attempted in India. The passing of the much-awaited GST Bill signals a paradigm shift with a unified tax structure which will catalyse economic growth. GST will positively impact several sectors, including the automobile industry, by minimizing and simplifying the taxation burden. GST is expected to drive overall consumer demand since the cost for the logistics and supply chain inventory will be curtailed by almost 30-40 per cent, the benefits of which are expected to be passed on to the consumers. As next steps, the focus will be on establishing a robust infrastructure and harmonizing the licensing and environmental regulations across the states."
Congratulating the Minister of Finance, Mr Arun Jaitely, President ACMA, Arvind Balaji, said, “We are delighted that the GST bill has been passed by the Raja Sabha, this will pave the way for creation of ‘one India market’ by ending multiplicity of taxes, which often leads to a cascading effect. It will also give fillip to the Indian economy and the government’s agenda of ‘ease of doing businesses. We look forward to a faster implementation of GST”
To be applicable from 1st April, 2017, the GST will be passed on to the consumers as told by Anand Mahindra, meaning that the cars are going to cost less from next year.
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