Prospective Indian borrowers are reportedly cancelling tailor-made loan offers from banks and lenders. On Monday, news emerged of many customers waiting for the concessional rates to commence before signing on the dotted banking line.
At the start of September, India's 56th GST Council announced a substantial reduction in GST rates for auto vehicles. GST on cars up to 1,200 cc had been brought down to 18 percent from the previous 28 percent. A 10 percent reduction in GST has been attributed as a significant incentive - enables customers also offers value to manufacturers to sell briskly in the festive season.
WHY MAKE PURCHASES AFTER PITRU PAKSHA?
A PTI report cited an unnamed official as stating that in the run up to September 22, some customers who had their car loans approved were cancelling their loans. These customers sought to make a purchase after implementation of GST cuts. The report also cited another unnamed official as stating that uptake for auto loans has been delayed since many customers awaited from making big purchases during the period of Shradha or Pitru Paksha.
According to Hindu customs, Pitru Paksha season is usually observed by following a simple lifestyle. One is expected not to indulge in making big purchases such as real estate, vehicles, or other significant items. This is also a period of abstaining from non-vegetarian food and paying homage to ancestors. The 16-day lunar period of Pitru Paksha ends on September 21.
GST CONCESSIONS ON AUTOMOBILES
In India, the sub-1200 cc category includes the likes of Maruti Suzuki Swift, Baleno, Tata Tiago, Hyundai i20, Toyota Glanza, and Tata Punch. Some of the top models from Maruti Suzuki such as the Alto K10, Wagon R, and Celerio also fall within the sub-1200 cc bracket.
The GST revision has brought cheer among prospective buyers. Maruti Suzuki soon announced revised rates. For instance, rates for the popular Maruti Suzuki Wagon R were 8.5 percent down from the old ex-showroom price. The price for a petrol variant Wagon R was ₹ 5,78,500. However, with the GST revisions the revised rates for this model were lower by ₹ 49,329. The Wagon R CNG variant top-line has been cheaper by ₹ 60,841.
Two-wheeler manufacturers such as Bajaj Auto and TVS Motors too have joined in offering price revisions to customers. In fact, the landing price or MRP (maximum retail price) for a number of FMCG products has been revised.
Officially, the cut-off rates for GST revision is the eve of Navaratri or September 22. Post Navaratri, many automobile majors are anticipated to witness a jump in volumes.
