GST Rate Cuts Prompt Car Loan Cancellations
Banks face a surge in car loan cancellations due to GST rate cuts on vehicles. Customers delay purchases to benefit from reduced rates effective September 22. Banks waive fees to lure clients. The revised GST will lower costs on various goods with cars set to benefit significantly.
- Country:
- India
Banks are experiencing an uptick in requests to cancel approved car loans after a recent Goods and Services Tax (GST) rate cut announcement promises to reduce passenger vehicle prices.
The 56th GST Council meeting approved decreasing the tax rate for vehicles up to 1,200 cc from 28% to 18%, influencing customers to postpone their purchases until the cuts take effect on September 22.
Although customers are incurring cancellation charges, banks expect a rise in demand for fresh loans post-GST reduction, while auto companies face the expiration of Rs 2,500 crore in compensation cess.
(With inputs from agencies.)
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