Car or bicycle purchase during Diwali: Discover Your GST Obligations Here
The GST Council has introduced a new tax structure for various vehicles and luxury goods, effective from the upcoming GST 2.0 regime. Here's a breakdown of the changes:
Reduced Tax Slabs for Smaller Vehicles
The GST slab for small cars powered by petrol, CNG, or LPG, with engines up to 1200 cc and a size of up to 4000 mm, has been reduced from 29% to 18%. Similarly, the GST slab for small diesel cars with up to 1500 cc engines and a size of up to 4000 mm has been reduced from 31% to 18%. This means popular models such as Maruti Suzuki Alto K10, Maruti Suzuki Swift, Hyundai i20, Renault Kwid, Tata Tiago, Tata Altroz, and Hyundai Venue will become cheaper due to the GST revision.
New Tax Slabs for Different Vehicle Categories
The GST slab for petrol cars with an engine capacity between 1200 cc and 1500 cc has been reduced from 45% to 40%, which includes 28% GST and 17% cess. Models such as Maruti Suzuki Brezza, Maruti Suzuki XL6, Hyundai Creta, and Honda City are positioned in this slab.
For diesel cars, the slab for vehicles with up to 1500 cc engines has been reduced from 31% to 18%, while the slab for diesel cars with engine capacity above 1500 cc has been reduced from 48% to 40%, which includes 28% GST and 20% cess. Models such as the Tata Harrier, Tata Safari, Mahindra Scorpio-N, and Mahindra XUV700 are positioned in this slab.
No Change in Tax for Electric Vehicles
Electric vehicles in India will continue to be taxed at 5% under the GST 2.0 regime, the same as the current tax rate.
Uncertainty for Luxury Goods and Upcoming Models
The GST Council has not provided specific details about the tax slab for luxury goods other than a 40% slab. Similarly, no information has been provided about how the new tax structure will affect the prices of upcoming cars or motorcycle models such as Indian Roadmaster, Indian FTR 1200, Indian Chieftain Limited, Indian Chieftain Classic, Indian Scout Bobber, or Yamaha MT 125.
Changes in Tax for Two-wheelers
Almost all two-wheeler manufacturers, including Hero MotoCorp, Honda, TVS, etc., will see a lower tax due to the 18% tax slab for motorcycles and scooters with an engine capacity of up to 350 cc. On the other hand, two-wheelers with an engine capacity of above 350 cc will now be taxed at 40%, up from 31%. This means bigger bikes from Royal Enfield and Harley-Davidson will be costlier with this move. Motorcycles and scooters with an engine capacity of up to 350 cc will now be taxed at 18%, down from 28%. This means all the 100 cc, 125 cc, 160 cc, 200 cc, 250 cc, and 350 cc engine-powered two-wheelers in India will be cheaper than before.
The GST Council has not provided specific details about the tax slab for bigger cars or motorcycles/scooters beyond the information provided in the current paragraph.
Two-Slab Structure for GST 2.0
The GST Council has implemented a two-slab structure for the GST 2.0 regime, consisting of 5% and 18%. However, the council has not provided any information about how the new tax structure will affect the prices of upcoming motorcycle models or the prices of luxury goods beyond the information provided in the current paragraph.
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