A pre GST sale in June with the intention of triggering the auto sale looked to be a successful one last month. But the post GST scenario don't seem to convince much.
Deliveries in July have skidded much and has fallen from a goof 50% to 30% depending upon the manufacturer and the state. Thus, the retail off take has declined noticeably oil the month of July.
“Retail sale have dropped this month as there was an advancement in purchases, driven by market offers announced in June. Wholesale dispatches last month, on the other hand, were postponed to prevent inventory devaluation to the extent of around 5 per cent. In July, the focus is more on wholesale as stocks were low across dealerships,” said RS Kalsi, executive director (sales & marketing), at Maruti Suzuki India.
The government had said it would not provide input tax credit for levies such as central sales tax, infra cess, and national calamity contingent duty on such inventory.
The loss on non-credit of tax (CST, NCCD, infra cess) amounts to anywhere between 3 per cent and 7 per cent of the cost of a vehicle, according to experts.
The decline was 2-3 per cent on an average in case of smaller cars, and up to 10 per cent in case of bigger, luxury vehicles. Interestingly, the price cuts did not spur purchases.
