GST Hike on Used Vehicles May Drive More Transactions to Informal Channels

The proposed GST hike on used vehicles is raising concerns about increased informal transactions. Used car dealers, industry players, and consumers fear that the increase in tax rates will drive more people to engage in unregistered, off-the-books transactions. This shift could result in reduced tax revenue for the government and make regulation harder for authorities. The fear is that buyers and sellers might turn to informal channels to avoid higher taxes, potentially compromising the intended outcomes of the policy. Industry experts have called for a balanced approach to ensure both the success of the tax increase and the minimization of its negative side effects.