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Oh Toh: GST dilemma

POSTED BY Dinesh Appavu ON 17 February 2015

Oh Toh 22

A family member put down a deposit for a new car model a few months back. The car is due to be delivered in April. A few days ago, the salesman he was dealing with informed him that the price of the car might go up following the implementation of GST come 1 April.

We are wondering if this is allowed by the law as we both believe the deposit he placed is as good as a binding contract that included the agreed price of the vehicle before GST came into the picture.

Please advise us on the situation here.

Michael

 

 

Reply: A few people have asked this question as a number of them are going through the same situation with bookings placed pre-GST and deliveries scheduled for post-GST.

By the law, all automotive purchase orders are equipped with a clause that indemnifies the manufacturer or dealer from any price changes that are beyond their control. GST is a perfect example of this clause coming into effect.

As the government is implementing GST, it is beyond the control of the manufacturer or dealer and hence the increments, or possibly decrements, will be passed on to the buyer.

However, a number of industry insiders that we spoke to regarding this situation did mention that they believe any change in the price; be it an increase of decrease, will be marginal so you might not feel the pinch that much.