After Prime Minister Narendra Modi said on Independence Day that the GST system would be made easier, the Finance Ministry has already set new tax rates for the auto industry. This reform will have a big effect on automobile pricing all around the country, with the goal of making tiny cars more affordable for customers.
Lower Prices for Small Cars
The GST rate on compact cars has gone down from 28% to 18% by the government. This decision will make popular models a lot cheaper, which is a big relief for anyone who are careful with their money. For example, the Maruti Suzuki Swift and Dzire automobiles are estimated to cost up to ₹60,000 less. The shift comes after the GST Council decided to get rid of the old four-tier tax system and replace it with a new two-slab system.
Here are the updated costs for some little automobiles that people like:
Model Current Price (Ex-showroom) Price After New GST (Ex-showroom) and New GST Rate Difference
Hyundai i20 N Line: ₹9.99–12.56 lakh, 18% ₹8.89–11.18 lakh ₹1.10–1.38 lakh
18% off Maruti Suzuki Swift, which costs ₹6.49–9.65 lakh ₹5.78–8.59 lakh ₹71k–1.06 lakh
The price of the Maruti Suzuki Wagon R is between ₹5.79 and ₹7.62 lakh, which is 18%. ₹5.15–6.78 lakh ₹64k–84k
Tata Tiago: 18% of ₹5–8.55 lakh ₹55,000–94,000 ₹4.45–7.61 lakh
Export to Sheets: Changes for High-End and Mid-Size Cars
The GST rate for expensive autos has gone up from 28% to 40% under the new rules. The GST Council has also gotten rid of the separate cess rates, which used to be between 17% and 22%. This might lower the total effective price of many luxury cars from firms like Mercedes-Benz and BMW, making them a little more accessible.
The GST rate on cars is based on more than just the price; it also takes into account the size of the engine. For example, the Maruti Suzuki Brezza, which has a 1.5-liter engine, will now have a GST rate of 40%. As stated in the table below, this modification is likely to have a mix of effects on mid-sized cars:
Model Current Price (Ex-showroom) Price After New GST (Ex-showroom) and New GST Rate Difference
Brezza from Maruti Suzuki 40% of ₹8.69–13.98 lakh ₹8.39–13.50 lakh ₹30,000–48,000
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The goal of this new tax structure is to make the GST system easier to understand and give real benefits to a lot of car buyers.