Deutsche Bank Sees India Tax Disrupting Auto Sector's Pricing
Here's What You'll Pay After India's Massive Tax Overhaul
India’s new goods and services tax is set to disrupt the sale and pricing of automobiles and ancillaries as companies offer discounts to run down inventories before the roll out of one of Prime Minister Narendra Modi’s biggest reforms, according to Deutsche Bank AG.
A new nationwide sales tax, that comes into effect on July 1, will combine more than a dozen levies, creating a uniform market across India for the first time. The changes mean that companies won’t be able to get credit for certain existing levies, including the so-called value added tax, once GST is introduced, Mumbai-based analyst Amyn Pirani wrote in a report on Thursday. That could lead to losses of as much as 7 percent on unsold inventory as of Friday, he wrote.