Due to the proposed cuts in the government’s GST rates, the prices of small cars including Maruti Suzuki may fall drastically. The GST on small petrol and diesel engines can be reduced from 28% to 18%, which will save buyers of millions of rupees. This change is likely to come into force by the end of this year, making it even easier to buy a car.
Popular models like Maruti Swift Desire can be reduced from 40,000 to Rs 1,00,000 as the GST rate of small cars decreased.
Currently, apart from 28% GST on small petrol cars, additional cess is also levied, which increases the total tax. The new scheme will reduce this tax burden.
The GST cut will not only benefit buyers, but will also increase demand in the automobile sector as prices will be encouraged by low prices.
Large cars and SUVs will be taxed under the new GST slab of 40%, which may be more than the current, so the prices of these vehicles will not change much.
Brands like Maruti Suzuki will benefit from this deduction as they are market prominent in small cars and will have an impact on the sale of these models.
Other vehicle manufacturers like Honda, Hyundai and Tata Motors can also benefit from this change as they also produce small and compact cars.
This change will increase competition in the auto industry, which will eventually bring better options and prices for the customer.
The GST rate for electric vehicles is currently 5%, but if the tax of petrol and diesel cars decreases, then their price may be attractive compared to EV, which can cause difficulty in increasing EV.