GST bachat utsav: car showrooms in Chennai pass on tax benefits to consumers

Chennai (Tamil Nadu) [India], September 22 (ANI): With the new Goods and Services (GST) tax rates coming into effect on Monday, car showrooms in Chennai have passed on the tax benefits to the consumers during the time of festivals.

In a bid to attract people to buy cars, the Maruti car showroom highlighted the benefits consumers will be getting as the GST rate rationalisation comes into effect.

According to the showroom’s manager, Sivaraj, around 2 thousand cars have already been booked in September due to the reduction in slabs.

“In the past month, more than 2 thousand bookings have been taken because of GST rate cut. Today is where the new prices have come in,” the manager told ANI.

“Before GST minimum cost of the car will be around 4.5 lakh, now it will be reduced to 3.4 lakh,” he added. The company has also released a special offer during Diwali.

The manager also mentioned that people could also prefer to spend a little more and buy a four wheeler instead of a two wheeler.

“Within 4.5 lakhs we can buy a car. For example, if you go to a two wheeler showroom, the price will be around 2 lakhs, but with an additional 2 lakhs they will buy a car. Now the GST reduction will be very useful to the users to buy a car,” he added.

He further said that the whole automobile market will also see a big boom.

“Right now the government has introduced big changes for automobile industry, where they have reduced GST from 28 per cent to 18 per cent and 45 per cent to 40 per cent. It makes a big impact to buy a car in current situation. We are a leading manufacturing company in India. We hold almost 53 per cent of market share, we are selling more than 1.5 lakh cars month on month,” he said.

While essential goods and daily-use items are among the biggest beneficiaries of the GST rate cut, automobiles have also seen a clear rationalisation of rates, with small cars, two-wheelers up to 350cc, and auto parts shifting from 28 per cent to 18 per cent. Buses, trucks, and three-wheelers have also benefited from the same reduction.

The discounts in the automobile sector are expected to trend down across key segments as the recent GST cuts are likely to lift demand, according to a report by Motilal Oswal.

The report noted that with a pick-up in demand, discounts should gradually reduce across categories, helping drive margin expansion for automakers.

It stated, “With a pick-up in demand, we also expect discounts to trend down across key segments, which should drive margin expansion going ahead. On the back of demand revival and much better earnings growth.”

While the premiumisation trend is expected to continue, Motilal Oswal also pointed out that small car demand is likely to grow from a very low base, contributing to overall recovery. (ANI)

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