GST rate cut: Auto sector to witness significant surge in demand

 

 

The new GST rates, which were announced on Wednesday, are expected to bring much-needed relief to consumers. With prices set to decrease ahead of the festive season, demand for several products and services is likely to reach a new level, and a sense of excitement is evident among consumers from all categories. The revised GST structure has brought relief to consumers of a large number of household items, leading to great enthusiasm among the buyers. However, market experts believe that items like two-wheelers, four-wheelers, and cement, on which the GST has been reduced from 28 per cent to 18 per cent, are likely to witness significant serge in demand. For example, petrol, LPG, and CNG cars with an engine capacity under 1,200 cc and a length under 4,000 mm, alongside diesel cars up to 1,500 cc will see their GST rate reduced from 28 per cent to 18 per cent.

 

This drastic drop in price is seen as a major tool to attract 15-20 per cent more buyers during the upcoming Navratri and Diwali. Commenting on the topic, Anuj Pande, President of Vidarbha Automobile Dealers Association, said, “this reform is a commendable step by the Central Government. It will bring in positive momentum across all market segments. For the automobile sector in particular, which has been facing a challenging period of subdued sales, this policy comes at a most opportune time. With the festive season approaching, when vehicle purchases are considered auspicious, the revised GST framework, commencing from September 22, is expected to significantly encourage buying sentiment,” he added. Achal Gandhi, Vise President of the association, said “This measure will undoubtedly provide a strong boost across all segments, including two-wheelers, passenger cars, commercial vehicles, and three-wheelers, thereby revitalising the industry and benefiting consumers alike.”

 

Achal Gandhi said that after the new rates come into effect, the buyers may get benefits of Rs 6,580 to Rs 70,000 depending on the brand and model of the vehicles. It is important to note that vehicle buyers will benefit from the GST rate cut on vehicles as well as on insurance. Gandhi further added that a lot of buyers have already started visiting dealers to book the vehicles.