New GST Benefits on Car Purchases: Save Thousands After This Date

This decision will benefit customers planning to buy small cars the most. Previously, petrol and CNG cars with engines up to 1200cc faced a total tax of 29 percent (28% GST + 1% cess), which will now be reduced to only 18 percent.

NEW GST Rates: Good news for those planning to buy a new vehicle in India! After much anticipation, Union Finance Minister Nirmala Sitharaman announced a reduction in Goods and Services Tax (GST) rates for certain categories of cars and two-wheelers. Cars with engine capacity up to 1200cc and less than 4 metres in length will now attract an 18% GST, down from 28%. Similarly, motorcycles and scooters with engine capacity below 350cc will see a 10% reduction in tax rates. However, these changes will not be implemented immediately; the new rates will come into effect from 22 September.

GST: Smaller Cars to Become Cheaper

This decision will benefit customers planning to buy smaller cars the most. Previously, petrol and CNG cars with engine capacity up to 1200cc incurred a total tax of 29% (28% GST + 1% cess), which will now reduce to 18%. This will significantly lower the on-road prices of these vehicles. Several companies in India, including Maruti Suzuki, Hyundai, Tata Motors, Mahindra, Kia, Toyota, Renault, Nissan, and Citroën, offer models in this category.

NEW GST Rates: Two-Wheeler Purchases to Become More Affordable

The benefits extend beyond four-wheelers to two-wheeler buyers as well. Bikes and scooters with engine capacity below 350cc will now attract an 18% GST, down from 28%. Most two-wheelers in India fall under this category. The majority of models from companies like Hero MotoCorp, Honda, TVS, Bajaj, Yamaha, Suzuki, and Royal Enfield have engine capacities below 350cc. This will benefit millions of customers.