GST 2.0: Large saving on small cars, prices will reduce 12-12.5%

Reset at GST rates is likely to increase the demand for small cars and two-wheelers in access-level customers, which have been away from the market for the past few years due to low income growth and inflation pressure. The GST Council has widely kept all petrol, diesel and hybrid vehicles at two tax rates – large SUVs are also going to be cheaper – 18% for 4 meters long vehicles and if they are long, 40%.In the current rule, smaller cars (less than 2cc and less than 100 cc) will attract smaller cars (less than 5cc and engine capacity for petrol) compared to September 1, compared to the total levy of 1-3 –3%. Motorcycles with engine capacity will be taxed less than 350 cc and now 28% tax will be taxed. According to the industry experts, the cost of X-showrooms of small cars will come down to 12-12.5%, if there is a 11% reduction in GST.

Also Read: GST 2.0 gets a green light; What is cheap and expensive since September 22?

This means that the prices for a car with X-showroom prices of Rs 500,000 will fall by Rs 62,500.

Large cars with sports utility vehicles and luxury vehicles will be slightly cheaper as the current CES will be taxed at a special rate of 40% compared to 43-50%. Auto parts have also been set to attract 18% (compared to the current 28%), the price value is likely to come down across the chain.

Overall, GST Rest will greatly reduce tax burden on market customers, increase volume in categories, but especially in small-car sections, experts said.

Associate Director of S&P Global Movement Gaurav Wangal said, “Reducing the GST by up to 90% on small cars is a big boost for the auto industry. Especially during the festive season of Cop Around. The demand for entry-level cars will be revived and compact models will be more affordable for buyers.” “Brands like Maruti, Tata and Mahindra are likely to benefit the most, especially with popular small crossover such as Franks and Punch.”

Sales of compact cars and hatchbacks in the financial year 1 in have dropped by 5 %. SUV sales increased from less than half to 5% by 5% to 5%. Overall, the share of small cars in the PV market came down for the fifth year and the financial year was 23.4% in the 25th.