India is all set to get its first ever uniform tax structure – Goods and Services Tax (GST) which will be implemented from 1st July, 2017. With the GST bill coming into effect, majority of the car dealers are aiming to lure customers by proffering heavy discounts on range of models from Maruti Suzuki WagonR to Mahindra XUV500. The car dealers are offering up to INR 30,000 discounts on Maruti Wagon R while the cash discount on Maruti Swift has been increased up to INR 20,000. The budget and mass market car are likely to see an upward revision in prices in between 3 percent to 5 percent post GST which may result in slump. Also Read: GST effect on cars: Maruti Suzuki Ciaz, Ertiga to get costlier by upto INR 1.5 lakh Also Read - Petrol, Diesel Can't Be Brought Under GST For Next 8-10 Years, BJP MP Sushil Modi Tells Parliament, Explains Reasons
Maruti’s popular offering – Maruti Alto also looks to attract consumers with cash discount ranging from INR 30,000 to INR 35,000 which has been increased from INR 20,000. The car dealers are also offering lucrative cash discount on Celerio which has been increased to INR 20,000. The cash discounts will accompany other benefits such as loyalty bonus and corporate discounts, and free insurance. As the consumers are hoping for better deals after the implementation of GST reason being they are postponing the purchases. Thus, dealers are looking to lure them with huge discounts. As the fact that electric vehicles and big SUVs will get better higher incidence of tax, thus, Maruti car dealers have increased discounts to attract buyers who can take deliveries by June 30. See Also: GST effect on cars: Discount of INR 70,000 on Maruti Suzuki S-Cross; S-Cross facelift to launch in India by October 2017 Also Read - High Petrol, Diesel Prices Burden on Consumers; Tax Cut Should be Joint Call of Centre, States: FM
A Maruti dealer stated that, Though GST will not impact the sub 4 metre cars but we are offering more discounts since we have to maintain our retail sales in June. Otherwise most of the customers will wait for GST to kick in. So the only way to deal with this development is increase the discounts. Also Read - CAIT Announces Nationwide Movement Against New Amendments in GST and E-Commerce
Moreover, Hyundai dealers are too opting for the same scheme wherein they have doubled the discounts on Eon and Grand i10 prior company discount announcement. As per the new tax rate under GST, cars and SUVs falling under the platform size of above 4 metres and diesel engine size of above 1.5 litre, will come under the tax slab of 43 percent as compared the existing tax rate of 51.5 percent and 55 percent respectively. See More: Bajaj Pulsar NS 160 price in India revealed? India launch post GST implementation
On the other hand, Mahindra & Mahindra, country’s leading utility maker is also offering lucrative discount of INR 1 lakh on XUV500. Mahindra & Mahindra dealer stated that, Currently there is Rs 30,000 discount on Scorpio hybrid and we are expecting an increase in price of the vehicle in the next couple of months. So we are trying to push this product. We still do not know the kind of impact GST will have on the prices from July.