Effects Of GST On Indian Car Market
An outlook on the possibilities, positives and negetives on the post GST market and how it effected the pricing
Getting your hands on the car of your choice has become more affordable now thanks to our Indian Government and their recent Economic strategies. They recently implemented a new Goods and Services Tax (GST) structure which has resulted in lower tax rates compared to before.
As a consequence of this, the prices of smaller cars in the bracket of Alto to Ford Figo has witnessed a tax drop of few thousand rupees. According to the new GST structure, people will now have to pay 29 percent instead of the 31 percent tax that was demanded earlier on smaller cars. Besides that, the rate of mid-size cars has also gone down as well because they also significantly have also witnessed a drop in tax of 3.6 percent. So, as a result, the prices of sedans like Volkswagen Vento, Honda City has also gone down by atleast INR. 15, 000.
The biggest benefit will be extended to the luxury car buyers because the rate of reduction now is an astonishing 8.8 percent whereas the SUV’s will now be charged at 43 percent compared to 55.3 percent charged earlier. But for all your information the value added costs vary from state to state and thus will not remain same across the Country. Some other expenses such as road tax, insurance and registration cost, however, are not counted under GST and thus will remain unchanged.
Below provided is the list of car manufacturers and their products whose prices have gone down because of the implementation of new Tax structure take a look.
Before we get into the list, let us inform you how the tax structure now stands and who will reap the biggest benefits.
- * All sub 4-meter vehicles which has a cubic capacity of less than 1.2 Litres will now draw 29 percent tax which includes 28 percent + 1 percent cess compared to 31.5 percent earlier.
- * All sub 4-meter vehicles which are powered by a less than 1.5 Litre diesel unit will now draw 31 percent tax rates which include 28 percent + 3 percent cess compared to 33.25 percent earlier.
- * All sub 4-meter vehicles which has a bigger engine than 1.2 Litre and 1.5 Litre diesel will now draw 43 percent tax rates which include 28 percent + 15 percent cess compared to 44.7 percent earlier.
- * Cars which are above sub 4 meters in length but not including the SUV’s which is powered by more than 1.2 Litre petrol and 1.5 Litre diesel unit will now attract 43 percent tax which includes 28 percent+ 15 percent cess compared to 51.6 percent earlier.
- * All the SUVs which are larger than 4 metres and be of any displacement or fuel type will now draw the same 43 percent tax which includes 28 percent+ 15 percent cess.
- * vThe only car category which has seen an increase in the overall taxation is Hybrid vehicles . The Hybrid cars will now draw a tax of 43 percent which includes 28 percent+ 15 percent Cess compared to 30.3 percent earlier.
- * Lastly, the Electric cars in the Indian market have also seen a downfall in the tax department these electric vehicles will now draw a tax rate of 12 percent compared to 20.5 percent earlier.
So now that you know about the tax structures and the other details let us inform you about the prices of some popular cars after the GST took effect from 1st of July 2017.
Maruti Alto 800 which is India’s most favourite small car has received a price drop in the range of INR. 2300-5400 now these prices includes both the Alto800 and the Alto K10 as well. Apart from that, the popular Maruti WagonR has also received a price drop of INR 5,300 to Rs 8,300 depending on the variants. The Maruti Celerio which is not as popular when compared to other two mentioned cars however it too has received a price cut of INR. 5,900 to Rs 8,700. The popular Swift hatchback too has received a price cut ranging from INR. 6,700 to Rs 10,700 which obviously will increase when Maruti introduces the next generation Swift hatchback sometime towards early 2018. The newly launch Dzire, fortunately, has also received a price cut of in the range in between INR. 8,100 to Rs 15,100. The diesel variant of the Vitara Brezza is eligible for a price cut of INR. 10,400 to Rs 14,700 offcourse depending on their variants. The petrol variants of both the Ciaz and the Ertiga too has received a drop in overall prices and because their diesel variants get a mild hybrid system the prices for this models are not out yet.
Tata Motors also have recently passed on their GST benefits of upto 12 percent of their passenger cars ranging in between INR 3300 and INR. 217000 depending on the model and variants.
HONDA CARS INDIA LIMITED
Besides Tata Motors Japanese Auto manufacturer Honda too has extended the significant amount of discounts on their cars. Their popular compact sedan Amaze received price discount of upto INR. 14,825 depending on the variants. Their famous Jazz hatchback too is now cheaper by upto INR. 10,031 while the Jazz based Crossover WR-V is also more affordable by atleast INR. 10, 064. Their favourite mid-size sedan City too has received a price cut in the range of INR. 6,510 and Rs 28,005. Their BR-V Crossover has also received a price cut upto INR. 30,387. The top of the range premium SUV CR-V has received a price cut of upto INR. 1,31,663. Their only Hybrid offering Accord prices are still undecided at this moment.
Renault small entry level KWID and the Pulse hatchbacks has received a price cut of INR. 6000-17, 000 depending on bthe variants while the Duster SUV too is now cheaper by almost 1 Lakhs rupees.
Nissan has also announced the reduction in prices post GST while the MIcra and the Micra Active is cheaper by upto INR. 11, 000 the Sunny sedan is now cheaper by upto INR. 32, 500. Their only SUV Terrano is expected to received a huge price cut upto INR. 1.35 Lakhs.
Renowned Ford cars like the Figo, Aspire and the Ecosport will receive a price cut in range of INR. 9,000 to Rs. 13,000. Believe it or not but the Endeavour SUV will receive an astounding price cut of INR. 2.70 Lakhs.
MAHINDRA & MAHINDRA
Mahindra SUVs like the KUV100 and the TUV300 will receive a price cut ranging in between INR. 11, 000 to 36, 000 depending on the variants.
TOYOTA KIRLOSKAR MOTORS
Another Japanese Auto manufacturer Toyota is also not far behind in the race either they already have announced their price cuts after July 1st. Their popular Innova Crysta MPV has received a price cut upto INR. 98,500 while their popular SUV the Fortuner cheaper by upto INR. 2.17 Lakhs all thanks to the 12 percent reduction rate that the SUV’s above sub 4 meters have received recently. Their smaller cars which include the Etios and Etios Platinum is now cheaper upto INR. 10,500 and 24,500 respectively.