A meeting held by GST Council has recommended a rate cut on used cars and biodiesel.
The 25thmeeting of GST Council headed by Finance Minister Arun Jaitley has revised the rates on various products, including old and used cars. Under the revised decision, along with the slashed GST rates, cess was also removed across several categories.
The used car market in India is growing at a rapid pace and currently the used car market is outpacing the new car sales in India. This move is a big push towards the used car segment which is a strong 2.5 million annual car market.
The new rates will be effective from January 25 in the country.
Here are the changes to tax rates of Goods recommended by the GST Council:
List of goods on which GST rate recommended for reduction from 28 per cent to 18 per cent:
Old and used motor vehicles on the margin of the supplier, subject to the condition that no input tax credit of central excise duty/value added tax or GST paid on such vehicles has been availed by him.
Buses, for use in public transport, which exclusively run on bio-fuels.
List of goods on which GST rate recommended for reduction from 28 per cent to 12 per cent:
All types of old and used motor vehicles [other than medium and large cars and SUVs] on the margin of the supplier of subject to the conditions that no input tax credit of central excise duty /value added tax or GST paid on such vehicles has been availed by him.
Manufacturers like Maruti Suzuki, Honda and other mainstream manufacturers sell used cars through their specialized used car channel like True Value and U-Trust. Online used car business is also booming at a rapid pace.