GST is probably the most significant tax development, recently. With the Goods and Services Tax bill, the Government aims of creating a uniform tax structure across the country. Automobile manufacturers are having different views on the effects of GST on car prices. The implementation of GST will have a different effect on each segment. Most buyers are confused, “Should I buy a car now or post GST?”Many of you might be wondering – “How GST will car price?”
Let’s find how car prices might be affected following the implementation of GST.
GST IMPACT – GST Effect on Car Prices
| CATEGORY | ENGINE | Pre-GST | Post-GST | PRICE DROP |
| Under 4-metres | Under 1.2-litre Petrol | 31.5{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 29{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 2.5{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} |
| Under 4-metres | Under 1.5-litre Diesel | 33.25{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 31{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 2.25{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} |
| Under 4-metres | Above 1.2-litre Petrol or 1.5-litre Diesel | 44.7{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 43{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 1.7{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} |
| Above 4-metres | Above 1.2-litre Petrol or 1.5-litre Diesel | 51.6{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 43{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 8.6{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} |
| SUVs | 55{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 43{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 12{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | |
| Hybrids | 30.3{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 43{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | – 13.3{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | |
| Electric Vehicles (EVs) | 20.5{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 12{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} | 7.5{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} |
Will cars cost less after GST?
Since GST proposes one tax structure, car manufactures will have to charge a same price across the country. This means ex-showroom prices of cars across India will be same. However, GST doesn’t include taxes like road tax, which differs across states. This means on road price will differ across the country. Small cars will come under the 28{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} GST slot. There will be extra 1{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} cess on petrol and 3{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} cess on diesel cars.
While cost of almost every car will decrease to at least certain extent, hybrid cars will see a price hike. The price difference between petrol and diesel cars will also increase. Mid-size cars (length more than 4 m, engine smaller than 1500 cc) like Maruti Ciaz will cost almost same with just a very small price cut expected for these cars.
Luxury cars will also come under the 28{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} tax slab, but an additional 15{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} cess will be charged on their purchase to ensure the Government doesn’t incur huge losses in revenue. Despite the additional cess, premium luxury cars will attract less tax, which means they will get cheaper.
Should I buy a car after GST?
The implementation of GST will have different impact on each segment. Small cars will see a price cut by slight margin. The prices of mid-segment cars like the City will be insignificant. The Maruti Ciaz Diesel which is a mild hybrid, is expected to be costlier.
However, SUVs and luxury cars will get cheaper, while hybrid vehicles will be most benefited. So, yes you should buy a car after GST in case you were planning to buy a SUV, luxury car or a hybrid car. Most mass market cars, however, will not get really cheaper after the introduction of GST.
| Car Category | GST |
| Small Cars | 28{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} + 1{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} or 3{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} cess |
| Mid-Size cars, Luxury Cars/SUVs | 28{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} + 15{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} cess |
| Electric vehicles | 12{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} |
| Hybrid vehicles | 28{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} + 15{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} |
Road tax – 3{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} to 24{52fc1907a0a3de5bb99ec1823a272c73f9cf5bae2273755893d388ae640ff405} (Different for every state)
Also Read Upcoming Subcompact SUVs in India