When should you buy a car? Here’s why GST cut buzz has buyers waiting

Car buyers across India are holding back from making purchases, and the reason is simple — speculation of a Goods and Services Tax (GST) rate cut. Dealers say enquiries remain strong, but bookings have slowed sharply as customers wait for possible price reductions before Diwali.

According to Nuvama Institutional Equities’ dealer checks, the slowdown is visible across passenger vehicles, two-wheelers, and tractors. Buyers are enquiring about models but prefer to delay purchases, expecting that GST rationalisation could make cars and bikes cheaper in the weeks ahead.

The Federation of Automobile Dealers Associations (FADA) has also flagged concerns, pointing out that the uncertainty is already hurting near-term demand. In rural markets, particularly for tractors and entry-level two-wheelers, the buzz about GST cuts is spreading fast and may dampen sentiment further.

Dealers believe the treatment of existing inventory will be crucial. If GST cuts apply to unsold stock as well, they will be able to pass on benefits to customers without taking a margin hit, which could help boost sales.

The GST Council is expected to discuss the proposal before Diwali. The plan includes merging the 12% and 28% slabs into 5% and 18%, while creating a 40% slab for luxury and sin goods. Small cars and two-wheelers may see GST reduced from 28% to 18%, while larger cars and SUVs could move into the 40% category.

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Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.

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