An empty car showroom with barely any buyers, hassled managers looking to clear the stocks in their inventory, struggling to explain the math behind the car pricing that simply doesn’t align with the rate reductions promised under GST 2.0, at least for now — these were the common scenes at several outlets of key automakers in Delhi — the country’s biggest car market. While customers have been coming in with queries in anticipation of deep discounts after the tax rate reduction under GST 2.0, they are in for some disappointment as the transitional issues for dealers have resulted in hurdles in the full pass through of the benefits.
While the GST overhaul has reduced the rates on several cars and also done away with the compensation cess, which is expected to make cars cheaper, dealers who have requisitioned the cars from manufacturers at the older rates have paid GST and cess on it. Those cars now – which dealers had stocked up due to the incoming festive season – are proving difficult to sell, as customers are unwilling to buy cars at the older rate. As a result, they are having to offer a discount on those cars out of their own pockets, with estimates suggesting that they could be staring at losses of Rs 2,500 crore, eroding their working capital. They are unsure whether there will be some relief in terms of refunds, and where it might come from.
Read more at: The Indian Express
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