With the GST Council cutting rates on small cars (less than or equal to 1200cc), two-wheelers (less than or equal to 350cc), and auto parts from 28 per cent to 18 per cent from September 22 onwards, many prospective vehicle buyers are asking a simple question: will I actually see the benefit, or will my dealer quietly hold on to the difference?
Popular car models eligible for the rate cuts include the Maruti Suzuki WagonR, the Tata Tiago, and the Renault Triber, whereas motorcycles eligible for rate cuts include the Royal Enfield Claasic 350, the Honda CBR350, and the KTM 250 Duke.
Every time tax rates change, reports emerge of dealers adjusting “handling charges” or citing “billing dates” to keep vehicle prices steady. This is called profiteering.
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For this, the government is considering bringing back anti-profiteering provisions for about two years, an official told Business Standard.
Anti-profiteering rules require businesses to pass on the benefit of any rate cuts to customers—either through lower prices or higher discounts.
In practice, that means if you buy a hatchback worth Rs 6 lakhs, the tax cut could lower your on-road costs by approximately Rs 50,000 or more. A commuter bike priced at Rs 2 lakhs might get cheaper by close to Rs 20,000. This money is meant to be money saved by the buyer, and not pocketed by the dealer.
The anti-profiteering provisions outlined in the CGST Act (2017) had led to the formation of the National Anti-Profiteering Authority (NAA), which had the power to regulate such unfair practices by companies.
However, after complaints from businesses, in addition to a sunset clause, the NAA was dissolved in 2022.
At the moment, people buying vehicles eligible for GST rate cuts from September 22 onwards have been advised to clearly check the GST rate on their tax invoice: it should reflect 18 per cent, not 28 per cent.
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Also, if the vehicle is booked—but not delivered—before September 22, you are legally entitled to the revised rate at the time of invoicing. Dealers cannot insist on charging the old slab.
For dealerships, the cuts may squeeze margins in the short term, but with festive season around the corner, lower on-road costs could translate to higher sales.