India’s GST rate cuts have sent car sales zooming to record highs, hinting at a revival in market demand that’s more than a festive season blip. Overall GST collection data looks strong too. But is it too early to celebrate?
India's GST rate cuts have sent car sales zooming to record highs, hinting at a revival in market demand that's more than a festive season blip. Overall GST collection data looks strong too. But is it too early to celebrate?
India's September cut in GST rates had the auto industry rejoicing. One can now see why. Carmakers posted record sales in October, as price cuts led by tax relief drew buyers in large numbers.
According to industry estimates, the wholesale offtake of passenger vehicles clocked 470,000 units, a 17% increase over last October. Almost all carmakers reported record domestic volumes.
Pent-up demand awaiting GST cuts this year may have amplified an annual festive-season surge in sales. But the acceleration is too sharp to attribute just to that factor, especially amid signs of a general rise in demand.
Car dealers across the country have been reporting increased footfalls, thanks to heavily taxed four-wheelers becoming more affordable. If this momentum is sustained, it would spell relief for a sector that has largely been in the slow lane.
Separately, India's GST intake for October grew 4.6% from a year earlier to ₹1.96 trillion. This data pertains to activity in September, but next month's mop-up will offer a full snapshot of the impact of broad-sweep GST reduction on the exchequer. Suspense hovers around how consumption and revenues will turn out in the quarter till end-December.