Cars- Getting cheaper or expensive post GST implementation

Cars- Getting cheaper or expensive post GST implementation

GST is on the verge of implementation and car dealers are giving away huge discounts. Everyone who is looking to buy a new car or replace an existing one is curious to know whether cars are going to be expensive or cheaper.

As per the GST, cars will fall under the luxury bracket and will attract a 28 % flat GST. Over and above, an extra of 1, 3 or 15 per cent is proposed depending on the classification.

GST Rates on Cars:

The cars are classified based on the length and engine capacity and type. Let’s discuss the various categories available in the Indian markets and the rate of GST and cess applicable thereof.

 

Type

Small 

Mid-size

Luxury 

SUVs

Meter Length < 4 metre length > 4 metre length > 4 metre length > 4 metre length

 

170 mm ground clearance

Engine Type Petrol < 1200 cc

 

Diesel < 1500 cc

Petrol < 1500 cc

 

Diesel < 1500 cc

Petrol > 1500 cc

 

Diesel > 1500 cc

Petrol > 1500 cc

 

Diesel > 1500 cc

Rate of GST 28% 28% 28% 28%
Cess 1-3% 15% 15% 15%
Total GST rate Petrol -29%

 

Diesel -31%

43% 43% 43%
Current Rates

 

(Excise & VAT+Cess)

Petrol- 26% – 34%

 

Diesel- 28% -35%

40.5% – 48.5% 44.5% – 51.5% 47.5% – 54.5%
 

Other taxes and costs involved:

 

1. Registration charges

Registration charges wont be impacted due to the GST regime coming into effect. They will more or less remain the same as compared to existing tax rates.

2. Motor insurance

Motor insurance is a mandatory provision before the car is sold to the buyer. Insurance services will attract GST rate of 18 percent , which is an increase as compared to existing rates of 15 percent. Hence, there will be additional tax burden on the end consumer at the time of purchase of the car.

Conclusion:

Small cars both petrol and diesel GST will end up increasing prices. Amongst the small cars, diesel make cars will be most affected segment post implementation of GST in India.

However, Luxury cars and SUVs may end up being cheaper than the price at which they are sold under current tax regime.

 


Visit HireCA.com Now