In India, majority of the vehicles like cars, motorcycles and trucks are subjected to GST which is as high as 28 per cent. Even though majority of the Indian prefer to use two-wheeler as a private vehicle, they have a desire to own a car. But as the GST rates on cars are high many prefer to stick to two wheelers as a private vehicle preference.
However, the future buyers for four wheeler vehicles might feel happy as Revenue Secretary Tarun Bajaj has hinted on the lowering of taxes by the central government. Recently, the Revenue Secretary while speaking at Society of Indian Automobile Manufacturers seminar told that the GST rates might be lowered in the future. This step will encourage certain segments of the middle class to purchase a car.
It is important to note that India is one of the largest automobile market in the world. However, the vehicle penetration in India per 100 people is very low in comparison to its immediate neighbour China. Even the western countries including Europe have far more vehicle penetration.
If the taxes on vehicles are reduced in India, it can subsequently lead to a rise in sales of cars. Recently many car manufactures in India had to raise the prices of their vehicles due to rise in manufacturing costs as well as rising taxes.
One of the other reasons why car sales have been hit in India is due to the rising fuel costs. If the central government can regulate the fuel prices in our country apart from taxes on vehicle manufacturing, the sales of cars will receive a huge boost.
Ms Kalinga