The ministry of heavy industries (MHI) has asked automobile companies -- carmakers as well as two-wheeler manufacturers -- to display posters showing a comparison of old and new prices, post the recent GST rationalisation, at all dealerships across the country.
Routing the instructions through the Society of Indian Automobile Manufacturers (Siam), the ministry also stated that the posters should carry Prime Minister Narendra Modi's photograph.
Government officials and industry executives confirmed this development to Business Standard.
Executives at automobile firms are now getting posters designed and sending them to the ministry for approval before display.
Whether the cost of printing and distributing these posters will be borne by companies, dealers, or divided between the two remains an open question.
One executive said the posters may vary depending on the local language of the dealership's location, raising doubts on whether each version would require separate approval from the ministry.
"There is no precedent for this activity. So, we have to see if we need approval for just the main poster -- which would be in English -- or for a poster developed for each language," an industry executive said.
Another industry source said that the automobile industry will be spending at least Rs 20 crore to Rs 30 crore on this activity. Luxury car companies have been kept out of the poster-printing mandate.
Major car companies such as Maruti Suzuki, Hyundai, Mahindra and Mahindra, Tata Motors, Toyota and Kia have already announced that they will pass full benefits of GST rate reduction to customers. This has reduced prices of all car models.
The GST Council had cut tax on small cars (less than 4 metres in length and under 1200 cc engine capacity for petrol and 1500 cc for diesel) to 18 per cent from 29 to 31 per cent (including cess).
As for larger cars (over 4 metres, over 1500 cc engine, and over 170 mm ground clearance), the tax rates have been slashed to 40 per cent from 50 percent (including cess). The Centre has withdrawn the compensation cess.
-- Deepak Patel, Business Standard
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