First day of GST, low-key affair at auto showroom

Just 12 hours after the country ushered in the Goods and Services Tax (GST), business was low-key at car dealerships in Noida, which is home to some of the biggest automobile showrooms of Maruti Suzuki, Volkswagen, Renault, Toyota and Mercedes-Benz. Following the midnight roll out of the new tax regime, showrooms were strategising and some were keeping under wraps the new prices which, they said, would be unveiled from Monday onward.

After a hectic seven-days leading up to GST’s launch that saw them clearing bulk of their standing stock, managers at Rohan Motors, in Sector 1, were huddled, devising sales strategy for the post-GST market. With the exception of two families, the place saw more staffers milling around. “We have received a circular from the top management that there would be a 3 per cent dip in prices of cars smaller than 4 metres with an engine below 1500 cc power.

Diesel hybrid cars such as Ertiga will get costlier because of the increase in cess,” said Pramod Tiwari, manager, corporate sales, Rohan Motors.

 For small petrol cars, a GST of 28 per cent plus a cess of 1 per cent would be applicable, compared to an earlier tax of 31.4 per cent. For hybrid diesel cars such as Ertiga, the GST of 43 per cent is going to be a steep rise of 12.7 per cent from the earlier tax of 30.3 per cent with the addition of 15 per cent cess.

The 3 per cent dip would translate into a Rs 8,000 to Rs 12,000 reduction in prices of cars such as Alto K-10, WagonR, Swift and Celerio, Tiwari added. The ambiguity over car prices also saw the company pushing to clear stocks before GST roll out. Customers who booked cars in June were under the impression that cars would become costlier, sales executives at the showroom said.