GST tweaks may impact electric vehicle demand, near-term car sales

Move likely to benefit smaller cars which have been under pressure

The Centre’s proposed goods and services tax (GST) reduction may push customers to delay their purchases until clarity emerges.

 

Moreover, electric vehicles (EVs) may lose their tax arbitrage, say analysts.

 

Kumar Rakesh at BNP Paribas Securities India said there is a likelihood that customers will postpone their purchases over the immediate near-term due to lack of clarity on GST taxation.

 

“This could have an impact on demand during upcoming regional festivals in Maharashtra (Ganesh Chaturthi in August-end) and Kerala (Onam in August-end and September first week). The primary festival season is when the bulk of auto purchases happen in India