How Will GST Effect Prices of Cars and Two Wheelers – A Complete Guide

GST Impact On Cars Bikes

Now that GST has been implemented, we give you a breakthrough of prices across segments based on the body length and engine capacity.

As GST kicks in from today, carmakers are still working on the new prices, likely to be announced either today or by Monday. Barring hybrids, all segments will benefit from the ‘one nation, one tax’ regime. Similarly, the bikes with engines above 350cc capacity are set to bear the burden of new rates. While GST brings tax parity across India, some sectors will benefit from its merits, on the contrary some may face distress.

One must note that the change in prices across segments will directly impact the manufacturing which will in turn effect the part-providers and dealer margins. While bookings are open over the weekend, the billing will be resumed from Monday onwards. As auto giants are still working out the prices, customers have been assured that prices will be protected, even if they make a purchase in the pre-GST regime. Read – Impact Of GST: Small Cars To Get Costlier

Now that GST has been implemented, we give you a breakthrough of prices across segments based on the body length and engine capacity.

Premium SUVs Above 4m length Get Cheaper by 12%

Large SUVs with more than 4-meter length and irrespective of the displacement of engine are now being taxed at 43%, witnessing a drop by 12% opposed to the previous 55%. Cars that come under this category include the likes of Audi Q7, Ford Endeavour, Mahindra XUV500, Tata Hexa, Volkswagen Tiguan, Toyota Fortuner, Mahindra Scorpio etc.

Premium sedans, mid-size sedans and larger hatchbacks get cheaper by 8.6%

Cars above 4-meters length with petrol engine above 1.2-litre and diesel engine above 1.5-litre capacity will also see slash in prices by 8.6%. This will cover sedans like Honda City, Maruti Suzuki Ciaz, Mercedes-Benz E-Class, Mercedes S-Class and even larger premium hatchbacks. According to the new tax structure, the vehicles in this category will be levied 43% tax against the previous 51.6%.

Subcompact SUVs and sedans get cheaper by 1.7% to 2.25%

Next are the subcompact cars with diesel engines less than 1.5-litre. It is indeed one of the thriving segments in India that caters to a large customer base. Vehicles like Maruti Vitara Brezza, Mahindra KUV100, Maruti Dzire, Hyundai i20 diesel, Mahindra TUV300, Ford EcoSport diesel, Tata Tigor, Hyundai Xcent etc come under this category. Though, the change in price will be marginal (around 2.25%) as the tax structure has been changed from 33.25% to 31%. On the other hand, sub four-meter vehicles with petrol engine above 1.2-litre and diesel engine above 1.5-litre will be levied 43% tax compared to the earlier 44.7%, thereby benefiting models like Ford EcoSport petrol and Hyundai i20 1.4L petrol.

Small Cars get cheaper by 2.5%

The hatchback segment with petrol engine less than 1.2-litre will see price reduction by 2.5% to 29% against the pre-GST tax structure of 31.5%. This will impact the following cars – Maruti Alto, Maruti Baleno, Hyundai i20, Volkswagen Polo, Toyota Liva, Tata Tiago and Hyundai Grand i10.

Electric Vehicles get cheaper by 7.5%

In a bid to promote EVs in India, the government has reduced the tax on electric vehicles by 7.5% to 12%. That said, EVs earlier attracted 20.5% tax. It will benefit Mahindra’s all electric e20 and eVerito models.

Hybrids get dearer by 13.3%

The only segment that will bear the burden of GST is the hybrid segment. As carmakers were gearing up to invest in the segment, GST has come in as a huge setback for hybrid cars. Effective today, hybrids will attract 43% tax, opposed to the previous 30.3%. With this, cars like Honda Accord Hybrid, Volvo XC 90 T8, Lexus ES300h and Toyota Prius will get dearer substantially.

How will GST Impact two-wheelers

GST brings in good news for two-wheeler manufacturers as prices of models like Honda Activa, Hero Super Splendor will go down by up to Rs 3,000- Rs 4,000. Hero Moto Corp will slash prices of its bikes and scooters by 5%, similarly other manufacturers including Honda will also pass on the benefits to the customers. On the contrary, bikes with engines above 350cc will get dearer, this includes models like Triumph Street Twin, Royal Enfield 350 and Royal Enfield 500 and other high-end bikes from Harley-Davison and Ducati.

While carmakers and two-wheeler manufacturers are still working on the new prices, likely to be revealed either today or by Monday, here are few examples to give you an insight into the revised prices of some popular models.

Cars Pre-GST pricePost-GST price
Toyota FortunerRs 26.6 lakh -Rs 31.9 lakhRs 24.5 lakh -Rs 29.8 lakh
Toyota InnovaRs 14.2 lakh to Rs 21.4 lakhRs 13.3 lakh to Rs 20.50 lakh
Hyundai CretaRs 9.3 lakh to Rs 14.6 lakhRs 8.9 lakh to Rs 14 lakh
Mercedes E-ClassRs 55.7 lakh to Rs 69 lakhRs 53.7 lakh to Rs 67 lakh
Mercedes GLS350Rs 83 lakhRs 80 lakh
Two-WheelersPre-GST price Post-GST price
Honda ActivaRs 48.3KRs 44.9k
Hero SplendorRs 55.6KRs 53K

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