The big Independence Day announcement by Modi could mean that small cars and bikesare likely to get a major boost ahead of the festive season.
A major reform has been proposed, especially for cars below 1,200 cc and two-wheelers below 350 cc, to make them more affordable for buyers.
Two-wheelers having 350 cc engines or lower will also see a GST rate cut from the current28 per cent to 18 per cent
Taxes on cars with 1200 cc or smaller engines are likely to be reduced from the current 28per cent (plus cess) to 18 per cent. A similar reduction could also be seen in hybrid cars (up to1500 cc).
Most other passenger car segments will likely be in the same category & could attract a flat tax of 40 per cent, & the current cess rates (up to 22 per cent) will determine if the prices will come down or rise.
The new tax slabs are expected to be announced later this month.