if gst is reduced for all vehicles including existing bsiv compliant inventory in the market dealers will be in a fix bajaj said mumbai the captains of indias automobile industry are keen on a gst cut but have differing views on how to administer the tax reliefwhile indias automobile industry clamours for a cut in the goods and services tax to help revive demand differences have now arisen over when it should be done and the products that should benefita gst reduction should be implemented closer to the launch of vehicles compliant with bsvi emission norms effective april next year because they would be more expensive and a tax cut would soften prices for consumers rajiv bajaj managing director of bajaj auto told et last week advt bsvi norms will be applicable on all vehicles registered from april 2020 the benefits should be limited to these vehicles to incentivise manufacturers to expedite their launch he saidsuch a move would limit the impact on the governments revenue since the lower gst will be levied on the more expensive vehicles and potentially on higher volumes if demand revives bajaj said read alsogst rate cut to spur demand for cleaner vehiclesonly gst cut can prompt consumers to start buying cars pawan goenka however pawan goenka managing director of mahindra mahindra said if gst is to be relaxed it should be done quicklythe worst thing that can happen is giving an indication that there may be a gst reduction and then wait he said in such a case customers would defer their purchases in anticipation of a tax cuteven if a decision is taken not to provide any tax relief it should be communicated urgently goenka said otherwise it would hurt the industry more than help itif gst is reduced for all vehicles including existing bsiv compliant inventory in the market dealers will be in a fix bajaj said they would have already paid tax at the existing rate on their holding inventory and customers would be unwilling to pay the higher rate ultimately manufacturers would have to reimburse the difference to the dealers according to bajaj advt if gst is reduced by 10 percentage points to 18 the potential reimbursement for twowheeler makers on inventory existing in the market could add up to rs 1500 crore bajaj said the sum could be higher for passenger vehicle makers however goenka said that while this might have been a problem in the earlier tax regime under gst inventory will not be a constraint because dealers can set off the tax differentialaccording to suresh rohira partner at accounting firm grant thornton a reduction in gst on the existing inventory will lead to excess gst credit on the books of dealers by nehal chaliawala et bureau published on aug 9 2019 at 0744 am ist telegram facebook copy link be the first one to comment comment now comments comment now read comment 1 all comments post post find this comment offensive choose your reason