The Indian automotive market is buzzing with excitement as new Goods and Services Tax (GST) reforms, implemented from September 22nd, have led to significant price drops for many vehicles. This move, announced by Finance Minister Nirmala Sitharaman, aims to make vehicles more accessible, especially entry-level models.
Previously falling under the 28% tax bracket, vehicles and motorcycles with engines up to 350cc have now been moved to an 18% tax bracket. This reduction makes these popular modes of transport more budget-friendly.
For larger vehicles, those above 350cc for two-wheelers and bigger cars that don’t meet the ‘small car’ criteria, the GST has been revised. They now fall under the 40% slab for luxury goods, a reduction from the previous combined rate of nearly 50% (28% GST plus up to 22% cess). Meanwhile, electric vehicles continue to benefit from a favorable 5% GST bracket.
What Defines a Small Car?
To be classified as a small car, a vehicle must have a petrol engine capacity of up to 1200cc or a diesel engine capacity of up to 1500cc, with an overall length not exceeding 4000 mm. This means models like the Maruti Suzuki Alto and Hyundai i10 are now more affordable due to the reduced 18% GST.
Major Manufacturers Announce Price Revisions
In response to the GST adjustments, leading car manufacturers have passed on the benefits to consumers:
- Tata Motors: The company has announced price cuts of up to ₹1,55,000. The Tiago and Tigor models have seen price reductions of up to ₹75,000 and ₹80,000 respectively, with further price adjustments on models like the Altroz, Punch, Nexon, Curvv, Harrier, and Safari.
- Mahindra: SUV giant Mahindra is reducing prices across its popular models. The Bolero, Bolero Neo, XUV 3XO, and Thar 2WD (Diesel) will benefit from the 18% tax bracket, while other models will attract the 40% GST.
- Maruti Suzuki: Maruti Suzuki has made its entry-level Alto K10 cheaper by ₹1,07,600, bringing its new price to ₹3,69,900. The Grand Vitara also received a similar price cut, now priced at ₹10,76,500.
- Renault: Renault has announced price reductions of up to ₹96,395. The Kiger’s price has been lowered from ₹11,29,995 to ₹10,33,600, and the Kwid Climber is now priced from ₹5,90,000 to ₹6,44,995.
- Jeep: Jeep India has revised its SUV prices, with reductions of up to ₹4.84 lakh. The Jeep Compass now starts at ₹17.73 lakh (down from ₹18.99 lakh), and the Jeep Meridian is priced at ₹23.33 lakh (down from ₹24.99 lakh).
These price adjustments are expected to boost sales and make vehicle ownership more accessible for a wider range of Indian consumers.