Home News

Branded used car dealers are looking for lower rate of GST

SHARE

Mumbai – A firm called Big Boy Toyz specializing in selling used luxury cars has decided to put a hold on the plan of expansion due to GST implementation. According to the tax structure, the used cars are now treated per the brand new ones. The Big Boy Toyz has grouped with other firms that sale organized luxury used cars and made a demonstration to GST Council asking to review the structure of tax.

Under GST law the used cars are charged 28% tax and 43% tax. This depends on the gross margin of the fuel type and the size of an engine. This rate compares to the 5% on the gross margin or 2% on the sales value.

The new tax system has severely affected the Big Boy Toyz. The car models that this car firm deals with fall under the high tax bracket which 43%.

The car firm has decided to expand their stores in Mumbai and Hyderabad. However, with the introduction of the new tax system, the firm had to halt the plan.

The Maruti Suzuki India Ltd. has decided not to comment on the subject. They have not responded to the uproar that has arisen due to GST.

The high tax rate, said a used car dealer in the letter to Hasmukh Adhia, the revenue secretary, has put the used car dealers in risk. This is a setback for the dealers said the letter.

It is only 12% of the used car transactions occur through branded dealers. The high rate of tax would send the buyers to the unregistered dealers who would not charge GST because they don’t fall under the tax system.

The high tax would affect the event of selling used cars. Due to this people would postpone their decision to buy new cars. Over the past six years, the Big Boy Toyz had been growing. However, that growth has come to a sudden halt due to GST, and the firm’s target of 2020 might not be accomplished.

SHARE
Aditi Ghosh
Aditi is a marketing consultant and full-time author at The GST Blog. Content marketing and social media promotion are one of her specialties. When she is not working, Aditi turns to her writing skill and offers promotional tips or information to the readers.

Leave a Reply