GST standardisation at 18% puts pressure on organised used car players
The GST Council’s decision to impose a uniform 18 per cent tax on the sale of old and used vehicles is set to shake up India’s pre-owned car market. Previously, the tax ranged from 5 per cent to 28 per cent based on factors like model and engine type.
While the move aims to streamline taxation and bring in standard rates across segments, industry experts highlight growing distress as this adds to their growing bucket of costs, while straining their finances for organised industry players who already operate on thin profit margins.
The revised structure has sparked confusion among dealers, with many misinterpreting the move as a tax hike. However, industry experts clarify that the government has merely unified the tax rate to 18 per cent per cent across all vehicle categories.
