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A report by the Indian Express quoted government sources as saying that entry-level hatchbacks, small sedans and mini-SUVs can be brought into 18 % of GST tax slab. Currently, 28% GST and 1-3% cess are levied on them, which reaches 31% tax payable. If GST is cut, trains like Maruti Suzuki Alto K10, Maruti Suzuki S-Preso, Renault Kwid, Maruti Suzuki Wagon, Maruti Suzuki Dzire, Hyundai Aura, Tata Tigor, Tata Panch, Hyundai Exterities and Renalt Kigar will be cheered. There is a plan to keep large luxury cars and SUVs in a special category of 40%, so that more GST is installed on expensive vehicles.
The motorcycle will be cheap
There is also good news for those who buy motorcycles. Currently, 28% GST is imposed on bikes up to 350 cc, which can be reduced to 18%. The decrease in GST will reduce the prices of bikes like Hero Splendor Plus, Hero HF Deluxe, Bajaj Platina 100, TVS Sport, Bajaj CT 110X, TVS Star City Plus and Royal Enfield Classic 350. However, a high tax will be applicable on premium bikes with engine more than 350 cc.
Tax will decrease on mid-size cars
The tax burden of mid-size cars is also likely to get some relief. Currently, a total of 43% tax is levied on these trains, which can be reduced to 40%. Its impact will also be seen on the prices of mid-range sedan and compact SUVs.
Small cars will get a boost
Industry experts say that companies will now promote vehicles with engine capacity less than 1200 cc capacity in the market, so that consumers can take advantage of the cost benefits from decrease in GST rate. This means that there will be more option for common customers and the opportunity to buy a car at an affordable price.
The government believes that small cars and low engine capacity bikes are neither luxury items nor demerit goods. Therefore, this step is being taken to make them cheap. The dream of buying a car and bike will be even easier for the common man as soon as the new tax structure is implemented.
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