Effect of gst rate on indian automobile sector

Due to reduction in levy of overall taxes , it is anticipated that price of automobiles should be reduced but I doubt practically whether any benefits would be passed on any ultimate consumer by the manufacturers in general.

If and when GST comes- all manufacturers would  reduce the prices by around 5% from the prices pre gst on cars manufactured after GST. This is for the reason that they are seeking price reduction from all the A category vendors to reduce the price appropriately so they would not loose too much. It shouldbe remebered that CAR cos do not make much much by sale of cars but more from spares sales.

Further under the GST law there is a provision of anti profiteering where the benefit of lower taxes needs tobe passed on and demonstared. Tax compliant comanies would not like to get inot disputes.