Revving Up Tax Reform: GST Overhaul for Automobiles
The government plans to restructure the GST on automobiles, moving from a four-slab to a mainly two-tier system. This change aims to resolve engine capacity disputes and reduce car prices, benefiting consumers. Discussions among government bodies will finalize the new GST structure by early next month.
- Country:
- India
Government sources have revealed plans for a significant overhaul of the Goods and Services Tax (GST) on automobiles, aimed at simplifying tax classifications based on engine capacity and vehicle size.
Currently nestled in a hefty tax slab of 28%, automobiles bear an additional compensation cess ranging between 1% and 22%, depending on the type of vehicle.
Amidst ongoing policy discussions, the Centre is advocating a two-tier GST rate structure of 5% and 18%, with a separate 40% slab proposed for a select range of items. These reforms promise not only to simplify the tax system but also to enhance car affordability and stimulate consumer demand.
(With inputs from agencies.)
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