As we know the automobile industry in India is one of the fastest and fastest-growing sectors and constitutes 27 per cent of the industrial gross domestic product (GDP) and 49 per cent of manufacturing GDP. The auto industry furnishes jobs to approximately 37 million people directly and indirectly. In this article, we will discuss GST on Automobile and the significance of GST Registration.
Before diving deep directly into the topic, let us learn about GST.
Comprehend GST(Goods and Services Tax)
The GST (Goods and Services Tax) considered as a tax on either the supply of goods or services. In India, the Goods and Services Tax (GST) is a multi-stage, destination-based tax pertained on any value addition. GST (Goods and Services Tax) is a single domestic indirect tax law that governs the whole country.
GST has many advantages. For instance, All operations, such as registering, filing, reimbursement request, and responding to notice, are always obtained online via the GST portal. As a result, the method is sharp and straightforward.
To get benefits of GST, companies need to get GST Registration.
Implication of GST Registration
GST Registration is crucial in several terms as it has mentioned below advantages.
- The GST reduces the tax cascade effect.
- It furnishes the composition scheme for small companies with a higher registration threshold.
- The online method is easy and fast.
- The amount of compliances is more limited.
- Logistics productivity has enhanced.
- GST regulates the unorganized market.
GST on Automobile
The two taxes imposed to the end buyer on Automobile services like car and bikes previously were excise and VAT, with an average combined rate of 26.50 to 44% which is higher than the GST rates of 18 and 28%. Therefore, there will be less burden of tax on the end buyer under GST.
SAC Code Applicable for Automobile
The following SAC (Service Accounting Code) has established for the Automobile Industry.
- 9966 Rental services of transport automobiles without operators
- 9960 Rental services of transport automobiles with operators
- 996601 Rental services of road comprising, buses, car, coaches, trucks etc.