TIMESOFINDIA.COM The proposed cut in goods and services tax (GST) rates is being welcomed by consumers, but companies across sectors are reporting a slowdown in sales as buyers wait for lower prices ahead of PM Modi's Diwali gift promise. The changes, if approved, may also create new challenges for India’s electric vehicle (EV) industry. Retailers say demand that usually picks up from Ganesh Chaturthi and Onam has remained muted this year, Times Of India (TOI) has reported. Many buyers are postponing purchases, expecting prices to fall once the GST Council finalises the rate cuts. “We are worried as the festive opening is normally a bumper period, running up to Dussehra and Diwali. But the news of a GST rate cut and impending reduction in retail prices is keeping buyers out of the market till the time a decision finally happens on the ground,” car and consumer goods companies and retailers told TOI's Pankaj Doval. Electronics retailers said shoppers are already asking about reduced prices on TVs, ACs and dishwashers. “We are already getting numerous queries from buyers about price cuts and when they will actually happen. Buyers say they will now wait for the price reduction before taking deliveries,” CEO of one of the top consumer goods companies told TOI.Live Events Auto dealers are facing a similar problem. Car bookings are being cancelled, and showrooms are witnessing weak conversions in states like Kerala and Maharashtra. What may get cheaper The government is likely to reduce GST on small cars and two-wheelers from 28% to 18%. For larger TVs, ACs and dishwashers, a similar tax cut is being anticipated. Final changes will depend on the GST Council’s decision. Saharsh Damani, CEO of the Federation of Automotive Dealers Association (FADA), said they have already taken up the matter with commerce minister Piyush Goyal and heavy industries minister HD Kumaraswamy. “We are already seeing pressure in Kerala and Maharashtra when it comes to sales conversions. Dealers are carrying high inventory due to the expected festive rush and if the stock is not liquidated within 60 days, banks will charge higher interest rates (on inventory finance) while slapping penalties. We are seeking help from banks, car and two-wheeler companies and govt. We have been assured of help by both the ministers,” TOI quoted him as saying. Relief for consumers, dilemma for companies While the cuts will help consumers save during the festive season, companies are stuck in a wait-and-watch mode. Brands such as LG, Samsung and Sony have seen sales slowing down as buyers hold back purchases. EV makers fear setback The tax revision may also affect India’s electric car market. Small petrol and diesel cars could move into the 18% slab, making them cheaper and narrowing the gap with electric vehicles, which are taxed at 5%. Analysts warn this could reduce the cost advantage EVs currently enjoy, especially in the entry-level hatchback segment. A report by HSBC Research says EV makers might lose momentum if internal combustion engine (ICE) cars become cheaper. Electric passenger vehicle sales rose 93% in July, led by Tata Motors, but the overall share of EVs in total car sales is still small—about 4.5%. (With inputs from TOI)(You can now subscribe to our Economic Times WhatsApp channel) Read More News onGST ratesfestive salesPM Modi Diwali giftconsumer goodselectric vehicles Indiaprice reduction expectationsGST Council decisionsEV market challengesGST new structureGST news latest (Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online....moreless (You can now subscribe to our Economic Times WhatsApp channel)Read More News onGST ratesfestive salesPM Modi Diwali giftconsumer goodselectric vehicles Indiaprice reduction expectationsGST Council decisionsEV market challengesGST new structureGST news latest(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online....moreless