India’s automobile sector is received a huge boost from a major policy shift. The recent move in reformulating the Goods and Services Tax (GST) structure on a central level is expected to considerably ease the ownership burden of a small car.
The festival season is coming up and several top car manufacturers have already cut prices and lauding the policy change.
GST on Small Cars
GST Council has removed the 12% and 28% tax brackets from the GST structure. There are two main slabs 5% and 18% for GST. The new category of 40% as a part of GST has been introduced which is set aside for so-called sin goods.
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The new rates will come into effect on September 22 which also happens to be the beginning of Navratri and one of the auspicious festivals in India. According to the restructured format of taxation and all small cars now form part of the 18% tax ratio because of such an arrangement that will create a direct impact on the prices of a vehicle.
Automakers Pass on Benefits to Buyers
Tata Motors, Maruti Suzuki and Mahindra are some top auto manufacturers that have offered major cuts in prices across their portfolios immediately. Tata Motors has slashed prices by as much as 1.55 lakh rupees for certain models. Managing Director Shailesh Chandra, confirmed that the entire benefit of the GST rate cut will be passed on to customers.
It has emerged that Maruti’s Chairman R.C. Bhargava estimated reduction in car prices by 8.5% to 9%. Alto would see reduced prices by ₹40,000 to ₹50,000, while Wagon R drop by ₹60,000 to ₹67,000.
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Tata Motors: Detailed Price Reductions
Following are the price cuts from Tata’s updated list which remains effective from September 22:
- Tiago – ₹75,000
- Tigor – ₹80,000
- Altroz – ₹1.10 lakh
- Punch – ₹85,000
- Nexon – ₹1.55 lakh
- Curvv – ₹65,000
- Harrier – ₹1.40 lakh
- Safari – ₹1.45 lakh
This substantial repricing is bound to fire up demand just before the festive buying.
Why is Luxury Utility Vehicles to Get Costlier
Small cars but the situation is by contrast and different for larger vehicles. Utility vehicles (UVs) equipped with an engine capacity beyond 1500cc, length beyond 4000 mm and ground clearance exceeding 170 mm, shall attract the highest 40% GST without enjoying the advantage of the present tax cuts. This step is expected to confine emissions happy, high-end vehicle consumption, driving the acceptance of compact and fuel-efficient cars into the masses.
India’s auto market is all set for an exciting festive season leading fast-track buyer sentiment through affordability, accessibility and policy support.
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