GST Reforms To Slash Audi Prices By 6%, Expand Customer Base: India Head Balbir Singh Dhillon
"Once the rates start implementing on Sept. 22, the prices of our cars, will go down by 5-6%," said Audi's Balbir Dhillon.
The new Goods and Services Tax reform will not only improve pricing for customers but also expand the customer base, according to Balbir Singh Dhillon, head of Audi India.
"We are super excited and positive about this decision. Earlier, the highest GST and Cess was their on the luxury car industry," Dhillon told NDTV Profit. "This is a very positive step," he added.
On Wednesday, the GST Council, chaired by Finance Minister Nirmala Sitharaman declared a new tax scheme under which the rate on petrol and petrol hybrid, liquified petroleum gas, and compressed natural gas cars (not exceeding 1,200 cc and 4,000mm) will be reduced from 28% to 18% at its 56th meeting. All rates will go into effect on Sept. 22, the first day of Navratri.
"Once the GST rates get implemented on Sept. 22, the prices of our cars, will go down by 5-6%," he noted.
Dhillon highlighted that there is 'obviously' a price elasticity. The moment the price goes down, more customers buy the car. "Our segment glorifies and grows, if the economy grows overall," he said.
The GST Council Meeting, announced GST on small electric cars, electric SUVs and luxury electric cars to remain at 5%. While, all automobile parts will have a uniform taxation rate at 18%.
Diesel and diesel hybrid cars (not exceeding 1500 cc and 4000mm) will also see GST go down from 28% to 18%. Motorcycles (350 cc and below) will also be applicable for the reduction to 18% from 28%. Those exceeding 350 cc will be charged at 40%.
Dhillon noted that, the effect of GST reduction will put more money in the pockets of customers. "In general, if the demand grows it will help us to grow the demand further," he said.
He further shared, that Audi will still remain in the segment is represented by higher end segment.
On sales, the head of Audi India highlighted that festive season and the pile up potential buyers who have been waiting for the clarifications will come by in next few weeks. "GST reforms to help increase car ownership," he noted.
