Small cars, three-wheelers, and motorcycles falling below the 350cc category will now pay 18 per cent GST, as opposed to 28 per cent GST. The transfer will make baseline mobility much more affordable over the festive period.
According to the definition, small cars are petrol cars or diesel cars that have no more than 1200cc or 1500cc, and have a total length of no more than 4000mm.
In this category come popular models such as the Maruti Dzire and the proposed Kia Syros. This also applies to motorcycles like Royal Enfield Bullet and Classic 350, as well as autorickshaws and any compact hybrids within the same size constraints.
What Shifts to the 40% Slab?
The Council has also proposed a new 40 per cent GST on larger and luxury cars. This applies to:
Motorcycles above 350cc (e.g., KTM Duke 390, Triumph Speed 400).
SUVs and sedans above 4 metres in length or exceeding 1500cc engines (Hyundai Creta, Kia Seltos, Tata Harrier, Mahindra XUV700, Scorpio N).
Larger hybrids like the Maruti Grand Vitara, Toyota Innova Hycross, and Maruti Victoris hybrid variants.
Aircraft, yachts, and other luxury recreational vehicles.
Earlier, these vehicles attracted up to 50% tax due to an additional cess. With the cess removed, they now sit at a flat 40% rate, effectively making them cheaper than before.
Uniformity in Commercial Vehicles and Parts
Even commercial categories have been simplified. Buses, trucks and ambulances will now be taxed in the same way as 18 instead of 28. Automobile components also become simplified to a single 18% GST tax bracket, and confusion over the various HS codes is resolved.
EVs Stay Untouched
Electric vehicles remain subject to the 5 per cent concessional GST, making them the most tax-favoured choice. But no elucidation has been provided regarding high-end electric vehicles or luxury electric cars.
Why It Matters
To the buyers, this reduction will translate to actual savings. A hatchback that retailed at Rs 6 lakh (ex-factory) might now cost in the region of Rs 60,000 less as per the GST reductions.
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