Demonetization, GST and BS-IV Norms Dent Domestic Pre-owned Car Market

The demonetization coupled with GSTand BS-IV norms seem to have made a dent in the domestic pre-owned car market.

Banning of Rs 500 and Rs 1000 notes by Centre’s decision and greater access to credit have allowed for increased finance penetration in the organized segment, Indian Bluebook, a vehicle pricing research platform, said in a report released today.

According to the report, the current GST regime imposes a significantly higher burden on the dealer – on a pan-India basis – roughly twice the rate that was otherwise being incurred.

As per the report, in 70 per cent of states, dealers will have to pay higher taxes post-GST, compared to the old tax regime but the current GST structure is expected to give a fillip to C2C transactions. The highly fragmented pre-owned car market is divided into four categories — the organized, semi-organized, unorganized and consumer-to-consumer market.