Preparing to purchase a vehicle during Diwali? Let me inform you about the applicable GST rates.

New GST Regime Brings Changes to Vehicle Taxation

The GST Council has announced a new taxation regime, GST 2.0, which will have a significant impact on the prices of various vehicles in India. The new regime includes two slabs - 5% and 18%.

Under the new regime, smaller petrol and diesel cars will continue to be taxed at 18%, while the GST slab for luxury goods remains at 40%. However, the GST slabs for bigger petrol and diesel cars have been increased, but they will still be lower than the current regime.

For petrol cars with an engine capacity between 1200 cc and 1500 cc, the GST will be 40%, down from the current 45%. This includes models such as the Maruti Suzuki Brezza, Maruti Suzuki XL6, Hyundai Creta, and Honda City. Diesel cars with engine capacity above 1500 cc will be taxed at 40%, down from 48%. Models such as the Tata Harrier, Tata Safari, Mahindra Scorpio-N, and Mahindra XUV700 are positioned in this slab.

Two-wheelers with an engine capacity of above 350 cc will now be taxed at 40%, up from 31%. This means that bigger bikes from Royal Enfield and Harley-Davidson will be costlier with this move. However, the two-wheeler category, excluding those with engine capacity above 350 cc, will have lower taxes under the new GST slabs. Almost all two-wheeler manufacturers, including Hero MotoCorp, Honda, TVS, etc., will see a lower tax. Motorcycles and scooters with an engine capacity of up to 350 cc will now be taxed at 18%, down from 28%.

The GST 2.0 regime has brought some good news for smaller cars. The GST slab for small cars powered by petrol, CNG, or LPG, having an engine up to 1200 cc and a size of up to 4000 mm, has been reduced from 29% to 18%. This means that cars like the Maruti Suzuki Alto K10, Maruti Suzuki Swift, Hyundai i20, Renault Kwid, and Tata Tiago will be cheaper. Similarly, the GST slab for small diesel cars with up to 1500 cc engines and sized up to 4,000 mm has been reduced from 31% to 18%. The Tata Altroz and Hyundai Venue are examples of cars that will be cheaper due to the reduction in GST for diesel cars.

Interestingly, the specific models of the Indian Roadmaster, Indian FTR 1200, Indian Chieftain Limited, Indian Chieftain Classic, Indian Scout Bobber, and Yamaha MT 15 Version 2.0 were mentioned, but no information about their GST was provided.

Electric vehicles in India will continue to be taxed at 5% under the GST 2.0 regime, the same as the current tax rate.

Companies producing both cars and motorcycles subject to the 40% GST-2.0 tax rate include Honda, Yamaha, Suzuki, and TVS.

Preparing to purchase a vehicle during Diwali? Let me inform you about the applicable GST rates.