How much will be the savings on cars and bikes due to reduction in GST, people are postponing shopping till Diwali

GST 2.0: Shopping on Diwali is considered auspicious. In such a situation, if you get your favorite thing at a lower rate with a discount, then it will be icing on the cake. It is expected that small cars and two-wheelers may become cheaper this festive season. The central government is planning to reduce the Goods and Services Tax (GST) on cars and bikes from 28 percent to 18 percent.

If this happens, then the price of cars and bikes can fall by up to 10 percent. Due to this, many people are now waiting for Diwali by postponing their purchases. Due to this, sales in the auto sector have slowed down because everyone is waiting for the decisions to be taken in the GST Council meeting on the new tax slab.

Slowdown in the auto sector

Since people are still waiting for a reduction in GST rates, people are postponing their earlier plans to buy a car or bike. Its effect is being seen on the auto sector. Meanwhile, tractor sales have fallen by up to 32 percent. Sales of two-wheelers and trucks have fallen by 6-7 percent. Sales of passenger cars have also fallen by 1 percent. Global brokerage firm Jefferies believes that if GST is reduced, there will be an immediate jump in sales of two-wheelers and small cars.

What are the expectations?

The GST Council meeting is going to be held on 3-4 September. On this day it will be finalized which thing will be brought under which tax slab, on which things GST will be reduced, etc. However, for the time being, it is expected that the 28 percent slab will be removed for small cars and bikes. Electric vehicles and tractors will be brought under the purview of 5 percent GST. GST on luxury cars is going to remain at 40%, so there is no hope of relief for premium buyers.

How much will be the saving?

If you have bought a car worth 10 lakhs and GST on it is reduced from 28% to 18%, then you will save up to 1 lakh rupees. On the other hand, if it is a bike worth 1 lakh, then there will be a saving of up to 10,000 rupees. In such a situation, of course, the reduction in GST will increase the demand, to meet which production will increase and employment opportunities will also be created for more and more people in the industry.