Impact of GST on Indian Auto Industry - PowerPoint PPT Presentation

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Impact of GST on Indian Auto Industry

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The Automobile Industry is likely to earn from the new tax reform and the auto companies are expecting growth with the implementation of the GST in India. This will decrease several unnecessary logistics cost, remove trade hurdle and provide better interstate sales and delivery. According to the mentioned information, Here you will find some basic concepts of GST Impact on Automobile Industry, Positive Impact on Auto Sector etc. – PowerPoint PPT presentation

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Title: Impact of GST on Indian Auto Industry


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How GST will Impact the Indian Automobile Industry
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GST Impact on Automobile Industry
  • The Automobile Industry, the Implementation of
    GST would result in manufacturers spending lower
    taxes and the customers may also be profited.
  • Though, while the bill has been explained in the
    present session, it has to be okayed by the state
    assemblies and The GST deadline proposed by the
    Govt is April 2017. There have been several
    speculations regarding the impact of the GST on
    various sectors such as oil and gas sector,
    Telecom sector.

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  • The Automobile Industry is likely to earn from
    the new tax reform and the auto companies are
    requiring growth with the implementation of the
    GST in India.
  • This will decrease several unnecessary logistics
    cost, remove trade hurdle and give better
    interstate sales and delivery.

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GST Impact on Automobile Industry 
  • Further, with the effective tax rate dropping to
    around from 27 percent to 18 percent, the demands
    of the automobiles will get boosted.
  • It is considered that the on-road prices will go
    lower by 8 percent after the implementation of
    GST. The automobile creators have raised their
    views on the GST.

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How will the GST profit the Automobile Sector?
  • GST will be a positive effect for the automobile
    sector primarily because of the efficiency and
    the removal of cascading that is required with
    GST. And, to provide you an example, in an
    automobile sector, a car is manufactured in a
    particular state and frequently, 80 percent of
    these cars are sold to states outside the state
    of manufacturers to dealers outside the state.
  • So, today to accurate away give you an example,
    the two percent Central Sales Tax (CST) that they
    pay will not be there tomorrow because surely,
    origin tax is not there.

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How will the GST profit the Automobile Sector? 
  • Despite the two percent, CST will be a combined
    GST (IGST) which will be fully creditable by the
    dealer when he sells the car in the other state.
  • And even from a appropriation point of way, if
    there are interstate appropriation we suffer
    today at 2 percent CST which is a cost to the
    manufacturer, that also will not happen because
    those interstate appropriations will have an IGST
    in it which is again available as a full credit
    to the manufacturer if the credit rules are easy.

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POSITIVE IMPACT  ON  AUTO SECTOR
  • Vehicle prices - 
  • The excise duty for vehicles is arranged into
    four slabs, in which the modest tax rate is
    applicable to small cars. With GST
    implementation, taxes levied by the centre
    similar excise duty and state levels taxes like
    sales tax, road and registration tax would all be
    subsumed into one.
  • Assuming that the proposed tax rate of 18-20
    percent is accepted, the vehicle prices are
    expected to decrease. 

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POSITIVE IMPACT  ON  AUTO SECTOR 
  • One Market - 
  • The overall compliance burden is required to
    decrease and bring a higher efficiency in
    operations. From the Indirect tax perspective,
    the entire country will be treated as 'One
    Market' and will add to operational efficiencies.

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  • Overall economic activity is required to raise
    and we could require a better GDP growth that
    should push demand for vehicle across categories.
  • The impact of Tax cascading will go away that
    will decrease the overall cost of vehicle
    manufacturing. Every taxes on input paid will be
    offset by the output liability of GST.
  •      Read More _at_  GST Impact on Automobile
    Industry

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