Reduced GST rates: Passenger vehicles now cost 2-9% less according to a report. Discover the new prices, and see where electric vehicles (EVs) currently stand.
The GST Council's recent decision to reduce taxes in various automobile segments is expected to bring about a significant boost to several key players in the industry.
Among the expected beneficiaries are Uno Minda and Endurance Technologies, which are anticipated to benefit from stronger demand, while domestic tyre and battery OEMs will profit from better pricing in the replacement segment.
In the tractor OEMs sector, Maruti Suzuki, Hyundai, M&M, and Tata Motors are likely to benefit the most.
Kotak Institutional Equities has predicted on-road price reductions of 5-8% for two-wheelers, three-wheelers, commercial vehicles, and passenger vehicles, with a similar reduction for tractors as well.
The rate for passenger vehicles (over 1,200 cc petrol or 1,500 cc diesel) has been cut from 43-50% to a flat 40%. For two-wheelers above 350 cc, the tax will now be 40%, and Kotak expects on-road prices to rise by 7%.
However, the good news may not extend to export-heavy players such as Bharat Forge, BKT Tires, and Shriram Automall India, as they are expected to see limited benefits from the rate cuts.
On the other hand, Kotak expects companies such as Hero MotoCorp, TVS Motors, Eicher Motors, Mahindra & Mahindra, Maruti Suzuki India, and Hyundai Motor India to benefit the most from the rate cut. Maruti Suzuki India is seen as the largest beneficiary due to planned tax reductions favouring small cars in India. Hyundai Motor India and Tata Motors are also potentially set to gain from these reforms.
It is important to note that rates on electric vehicles (EVs) remain unchanged at 5%.
The GST Council has approved the rate cut for two-wheelers (except above 350 cc), three-wheelers, commercial vehicles, passenger vehicles, and tractor segments, effective from September 22. This decision is expected to stimulate growth and investment in the Indian automobile sector.
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