Goods and Services Tax (GST) was implemented in India on July 1, 2017, with the aim to bring uniformity in taxes across the country. Since its implementation, GST has had a significant impact on the Indian automobile industry, including the prices of cars and other vehicles.
Under the GST regime, the automobile industry is classified under the 28% tax slab. However, the GST rates on cars and other vehicles vary based on the price and type of the vehicle. Let's take a closer look at the GST impact on car prices and other automobiles in India, and understand the GST rates on automobiles.
The implementation of GST resulted in a reduction in the overall tax burden for consumers, as it eliminated multiple taxes such as Excise Duty, Value Added Tax (VAT), and Central Sales Tax (CST). However, the GST impact on car prices in India has been mixed, with some cars becoming cheaper, while others have become more expensive.
Previously, the tax structure for cars was based on the length, engine displacement, and other factors. This made it challenging for consumers to compare car prices across different states of India. Under GST, all cars are taxed at a flat rate of 28%, making it easier for consumers to compare car prices and make informed decisions.
Small cars below 4 meters in length with an engine capacity of less than 1200cc, such as Maruti Suzuki Alto and Hyundai Eon, have become cheaper under GST. The GST rate on such cars has reduced from 29% to 18%. Similarly, mid-sized cars like Honda City and Toyota Corolla Altis have seen a reduction in prices due to a lower GST rate of 18% compared to the previous tax rate of 43%.
However, luxury cars and Sports Utility Vehicles (SUVs) have become more expensive under GST due to a higher tax rate of 28%. The prices of luxury cars like Audi and BMW, and SUVs like Toyota Fortuner and Ford Endeavour have increased due to the higher GST rate.
Under the GST regime, automobiles are classified into different categories based on the engine capacity and price of the vehicle. The GST rates on automobiles in India are as follows:
It is essential to note that the GST rates on automobiles can change based on the decisions of the GST Council. For example, in 2018, the GST Council reduced the GST rate on electric vehicles from 12% to 5%, making them more affordable for consumers.
The GST impact on car prices and other automobiles in India has been significant since its implementation. While small cars and mid-sized cars have become cheaper under GST, luxury cars and SUVs have become more expensive. The GST rates on automobiles in India also vary based on the engine capacity and price of the vehicle.
Overall, GST has simplified the tax structure for the automobile industry, making it easier for consumers to compare car prices and make informed decisions. With the aim to promote the use of electric vehicles, the GST Council has also reduced the GST rate on electric vehicles, making them more affordable for consumers.
Barbed Wire - GST Rates HSN Code 7313
GST Rates and HSN Code for Wool, Not Carded or Combed
GST Rates and HSN Code for Carpets Woven