India's GST Overhaul: Tax Cuts on Cars and Insurance to Drive Market Boost
India plans significant tax reforms, aiming to reduce GST on small cars and insurance premiums. Proposed cuts could spur market growth, benefiting Maruti Suzuki in particular. Government proposes two main tax rates, eliminating the highest slab while planning increased taxes on 'sin-goods'. Markets respond positively, with boosts for auto and insurance stocks.
In a major move, India plans to reform its goods and services tax (GST) by cutting taxes on small cars and insurance premiums. This initiative could pave the way for major growth in the Indian market.
Prime Minister Narendra Modi's administration announced the most significant tax overhaul since 2017, outlining decreases in GST for small petrol and diesel cars to 18% from 28%, and contemplating reductions in taxes on insurance premiums. These adjustments are intended to make essential goods more affordable as part of broader financial reforms starting in October.
Despite potential strains on government revenue, the tax cuts have garnered approval from business leaders and political analysts, who see the changes as beneficial amid trade discussions with the U.S. The highest tax rates are set to be eliminated in favor of a simpler structure. Meanwhile, auto stocks surged in response to the announcement.
(With inputs from agencies.)
ALSO READ
UPDATE 2-EU still expects turbulence in trade relations with US
Massive Tariffs on Indian Exports: A Heavy Blow to Trade Relations
Trump's Tariff Tussle: Straining US-India Trade Relations
Trump's Tariff Tactics: A New Blow to US-India Trade Relations
Tariff Tensions: US-India Trade Relations at a Crossroads
Google News