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Maruti’s June sales rise marginally, cuts prices by up to 3% to pass on GST relief

LiveMint logoLiveMint 01-07-2017 Shally Seth Mohile

Mumbai: Car market leader, Maruti Suzuki India Ltd on Saturday said it’s passenger vehicles sales in June in the domestic market rose marginally 1% to 93,057 units over a year ago period. Even as the Utility vehicles sales kept up the sales momentum advancing 43%, entry level models such as Alto and Wagon R dropped 8%.

Automakers in India report despatches to dealers and not end buyers. As a run up to GST, some of the auto firms, including Maruti consciously reduced despatches to dealers in a bid to minimize losses on account of transition to the new unified tax regime.

In a separate statement the maker of best selling Baleno and Brezza models said it has passed on the entire benefit of GST rates on vehicles to its customers. As a result, the ex-showroom prices of its models have come down by upto 3%. The rate of reduction varies across locations depending on the VAT rates applicable prior to GST, it said.

Owing to withdrawal of tax concessions on mild hybrid vehicles, the price of Smart Hybrid Ciaz Diesel and Smart Hybrid Ertiga Diesel has increased, it added. The new prices are effective from 1 July 2017. With effect from today, India switches to a unified tax regime.

Under GST, most vehicles falls in the highest tax bracket of 28%, with an additional cess ranging from 1-15% based on the segment the vehicle falls under, its engine size and type (petrol or diesel) and the size of the vehicle.

Broadly, effective GST rates indicate the highest tax savings for sport utility vehicles (SUVs) for which the rate is down to 43% from the earlier 55.3%.

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