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Oj Corner
Special column
by OJ George

Cheque facility won't be withdrawn, says the govt
It is a matter of relief that the Union Government has clarified that cheque facility won't be withdrawn.

There were stray reports that an overenthusiastic government favaouring total digitalisation may go in for banning the cheque books.

It is gratifying to note that the government won't proceed with the reforms this way.
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Pre-GST or Post-GST, when you should buy a Car?
With the Goods and Service Tax (GST) about to be implemented from the 1st of July, the sector that is more concerned about clearing their stock is the automotive sector. It has become a very important point for the carmakers to push up their sale before the GST is applied.

Due to this urge of getting the pipeline cleared, automobile makers are offering huge discounts on the current gallery of cars and are luring the customers to buy the vehicle at the earliest. After GST is applied, the price of automobile vehicles will be hiked up ranging from 3% to 5% depending on the segment they belong to.

As a consumer, when should you should consider buying a car? Post-GST or Pre-GST? Letís analyse the situation and find it out.
What the new GST means
Presently, small cars like Maruti Suzuki Alto 800 or the Renault Kwid attract tax rates between 25% to 27.5%. However, with the new GST coming into the picture from the 1st of July 2017, the tax rate levied will increase to 29%. As for example, the Renault Kwid is pricedat Rs. 3.3 lakhs where the attached tax is 26%. However, after the new rates are implemented, this rate will go up to 29% and the price will be hiked by up to Rs. 8,000 for the exclusive showroom price as in Delhi.

Similarly, hybrid cars will also see a major increase in the prices post the GST implementation. Despite being partially eco-friendly and economical, hybrid cars will attract tax rates of whopping 43% from the present 30%. This means popular hybrid cars like the Toyota Camry Hybrid and the Honda Accord Hybrid will witness a price hike of Rs. 3 lakhs and Rs. 6 lakhs respectively.

However, the scenario completely turns on its head when it comes to big SUV and luxury cars. The present breed of luxury cars like the ones manufactured by Audi, Mercedes-Benz, BMW etc., attract GST rates of 44.5%. But the new GST rates suggest that these luxury cars will attract minimised 43% taxes. This, of course, means that we are in for a price cut off, though minimal, in the post-GST phase.

But the winner is this new GST game is SUV segment as the present GST implied on them is 48%. But according to the latest laid down taxation system, this segment also fall under the 43% tax slab. Hence, this segment will see a sharp 5% reduction in the tax rates. With this, we can very well expect, for example, Toyota Fortuner, which has a tag price of over Rs. 27 lakhs, to have a price reduction by over Rs. 1 lakh after the GST is implemented.

When you should buy a car?

We have seen how the GST has been uncertain and uneven on the various segment of cars. Contrary to the expectations of many, the small cars and subcompact vehicles, which are the main pillars of the Indian automobile market in the present situation, will see the prices being increased to a large extent.

Hence, given this very important factor, the first time buyers, who would have been hoping to get their hands on family-centric budget-friendly cars, will get a sharp pinch in their pockets. So if you are one with similar desires, the best time to be buying a small car is now when most of the automakers are offering discounts in order to get their stocks cleared before July 1, 2017.

There are many pre-GST discounts on offer too. Hyundai is offering price benefits of up to Rs. 25,000 on small cars like the Elite i20 and up to Rs. 2,50,000 on the big Santa Fe. Indiaís top automaker, Maruti Suzuki, is offering discounts from Rs. 25,000 to Rs. 30,000 on the Alto and the Swift. Ford is offering a mammoth discount of Rs. 1.5 lakh on the EcoSport.

On the other hand, the people, who are aiming to buy an SUV or a luxury saloon will get benefitted either way. As for a fact, the prices of the cars will inevitably come down post the GST is implemented. Yet, before the GST is implemented, some of the top automakers like JLR (Jaguar Land Rover), is offering heavy discounts of Rs. 2 lakhs to Rs. 5.5 lakhs on the XE and Rs. 4 lakhs to Rs. 11 lakhs in the XJ. Similarly, Mercedes-Benz is offering up to Rs. 1.4 lakhs on the entry-level CLA sedan and up to Rs. 7 lakhs on the premium Maybach S500 saloon.


Believe it or not, it is the automobile sector that has experienced one of the biggest difference after the announcements of the new GST rates. With the implementation nearing soon, the decision of buying a car before or after it has to be taken in the utmost prompt manner.

The people who are keen on buying a small car or a subcompact sedan or SUV under 4 meters in length and with an engine capacity of less than 1.2-litres (1,200 cc) for the petrol engine and less than 1.5-litre (1,500 cc) for the diesel engine, are suggested to get their hands on their favorite car right away, before the GST is implemented and before the automobile makers and authorized showroom dealers choose to withdraw the discounts allowed. Otherwise, the case will cause them to be charged at a rate of anywhere between 2% to 5%.

On the other hand, buying a luxury car or an SUV will be a profitable issue in any situation. As we all have known, the GST will cause the prices to be decreased by a good margin. However, this has not caused the brands to pass on some more benefits to the customers before the implementation as top luxury car makers have been offering eye-grabbing discounts. So it is either you wait for the later or buy now, the benefits will be more or less similar anyway.

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