The automobile industry has requested the Centre to expedite its implementation of new GST rates, to coincide with the Navratri period on September 22, people in the know told CNBC-TV18.
The automobile companies are fearing a negative impact on festive sales as await the new GST rates.
The automotive industry has also sought the resolution of procedural issues, including those related to input tax credit, sources added.
The anticipation of possible GST rate cuts on automobiles has already begun to weigh on sales momentum across the industry.
As per Nuvama Institutional Equities’ dealer channel checks last week, customer enquiries were healthy but fresh bookings witnessed a sharp slowdown over the past week as buyers adopt a wait-and-watch approach.
The Federation of Automobile Dealers Associations (FADA) also echoed these concerns in recent interactions, highlighting how GST-related uncertainty is already disrupting the near-term demand.
GST rationalisation
The Group of Ministers has accepted the Centre’s proposal to eliminate the existing 12% and 28% GST slabs, restructuring the tax regime into 5% and 18% brackets, with a separate 40% slab for luxury and sin goods. The proposal awaits GST Council approval ahead of Diwali.
The Centre is also considering reducing GST on small cars and two-wheelers from 28% to 18%, while large cars, including SUVs may move to the 40% slab.
The Centre is making efforts to notify the GST cuts as early as possible, ahead of the festive season. The final decision on the GST implementation rests with the GST Council, which is scheduled to meet on September 3-4 next.
