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New Delhi: India’s plan to restructure their goods and services (GST) regime is being seen as the most sweeping reform since it was introduced in 2017. For RC Bhargava, chairman of Maruti Suzuki, India’s largest carmaker, this change could be quite a big transformation.
In his interaction with Reuters on Monday, Bhagravan noted the move was going to make a big impact and said that it would sharpen the competitive edge of the Indian products. He even said that the opening of the trade border will give the needed competition that will expand the market and benefit the customers.
The government’s plan is a drastic reduction in GST rates for small cars and insurance premiums. According to media sources, the tax on small petrol and diesel cars could go down from 28 per cent to 18 per cent. Insurance premiums for health and life policies might also have a big drop, with rates going down from 18 per cent to five or even zero per cent.
The changes are part of the big push of Prime Minister Narendra Modi’s administration to ease the GST structure. In the weekend, the government revealed plans to collapse the multiple tax slabs into just two, five per cent and 18 per cent. The 28 per cent could be erased, though “sin goods” like tobacco and luxury items would have an increase of 40 per cent.
The benchmark Nifty index gained 1.3 per cent on Monday, very much in line for its best session in three months. Auto stocks, in fact, led the rally as pointed by Reuters, which said carmakers would gain the most if the proposal goes through. The reform is expected to bring down the product prices from October if the GST Council, chaired by the finance minister and state representatives, give it a green signal in their next meeting.
