On Independence day, Prime Minister Narendra Modi announced to simplify the GST regime in the country. Now, the Finance Minister has announced a great relaxation for the car buyers in the country with a relaxed tax slab.
Earlier, a 28 per cent GST was levied on the cars, with cess rate from 17-22 per cent. However, the GOI has announced that the small cars will now enjoy a lower tax slab of 18 per cent. Resultantly, making them cheaper by a fair margin. For example, the Maruti Suzuki Swift and Dzire will now get cheaper by roughly Rs 60,000 with reduced GST slabs.
However, the GST slab for the luxury cars is now shifted to 40 per cent, from the 28 per cent bracket they enjoyed earlier. Now, this might sound like an increase in the effective price of big and luxury cars. However, with the GST rationalisation, the council has dissolved the cess rate, making models from luxury carmakers like Mercedes-Benz, BMW, and slightly more affordable.
To make it more clear, here is a price comparison of the popular cars in the Indian market, with prices as per the earlier tax regime and the current one.
| Model | Current Price (Ex-showroom) | GST Rate (New) | Price After New GST (Ex-showroom) | Difference |
|---|---|---|---|---|
| Hyundai i20 N Line | Rs 9.99–12.56 lakh | 18% | Rs 8.89–11.18 lakh | Rs 1.10–1.38 lakh |
| Maruti Suzuki Swift | Rs 6.49–9.65 lakh | 18% | Rs 5.78–8.59 lakh | Rs 71k–1.06 lakh |
| Maruti Suzuki Wagon R | Rs 5.79–7.62 lakh | 18% | Rs 5.15–6.78 lakh | Rs 64k–84k |
| Tata Tiago | Rs 5–8.55 lakh | 18% | Rs 4.45–7.61 lakh | Rs 55k–94k |
| Maruti Suzuki Brezza | Rs 8.69–13.98 lakh | 40% | Rs 8.39–13.50 lakh | Rs 30k–48k |
Note: Since Brezza has a 1.5-liter engine, which exceeds the 18 per cent GST rate on cars with 1.2-liter engine, the Brezza will attract a 40 per cent GST rate.
Track Latest News Live on NDTV.com and get news updates from India and around the world
