GST rate cut on cars: Tata Nexon to get cheaper by ₹80,000, see price drop on other cars

Car Prices to Drop: From 22 September, the prices of many cars are set to decrease significantly. The government has reduced the GST rate on small and medium-sized cars from 28% to 18%.

GST Rate on Car: Changes in the GST slab are set to reduce the prices of several popular cars. If you're planning to buy a car now, hold off. From 22 September, when the new GST rates come into effect, car prices will decrease significantly. The GST Council has reduced the GST rate on most small and medium-sized cars from 28% to 18%. This represents a direct 10% reduction in the GST rate. However, luxury cars will attract a 40% tax. Even with this increase, the total tax on luxury cars will be lower than under the existing system.

How Much Tax is Currently Levied on Cars?

Currently, small petrol cars with an engine capacity of up to 1,200 cc and a length of less than 4 metres attract 28% GST and 1% cess. Small diesel cars with an engine capacity exceeding 1,500 cc and a length of less than 4 metres attract 28% GST and 3% cess, resulting in a total tax of 31%. Excluding electric vehicles, the GST rate on all cars is 28%, but the cess rate varies, leading to differences in the total tax. SUVs with an engine capacity exceeding 1,500 cc and a length greater than 4 metres currently attract a 50% tax, comprising 28% GST and 22% cess.

These Cars Will See Price Reductions

Maruti Suzuki Alto K10

This is one of India's most affordable cars and a popular choice among 1.0-litre petrol engine hatchbacks. It's widely used for both private and taxi services. The GST change will lower the Alto K10's price. Its price is expected to drop from ₹4.23 lakh (ex-showroom) to approximately ₹3.81 lakh (ex-showroom).

Tata Nexon

One of India's most popular and best-selling SUVs, the Tata Nexon's base model could see a price reduction of approximately ₹80,000. This car will now attract 18% GST.

Maruti Suzuki Swift and Dzire

These two popular cars will now attract 18% GST instead of 28%. Their prices are expected to decrease by approximately ₹60,000.

Tata Tiago

Considered one of the country's safest entry-level hatchbacks, it has received a 4-star safety rating from Global NCAP. Following the GST reduction, the starting price of the Tiago is expected to be ₹5.15 lakh (ex-showroom) instead of ₹5.65 lakh (ex-showroom).

Hyundai Grand i10

With the reduced GST rate, the price of this 1.2-litre engine small hatchback is expected to fall from ₹5.98 lakh (ex-showroom) to approximately ₹5.51 lakh (ex-showroom).

Maruti Suzuki S-Presso

The price of this affordable Maruti hatchback will also decrease. After the GST rate change, this car, currently priced at ₹4.26 lakh, could be available for ₹3.83 lakh.

Renault Kwid

The Renault Kwid, the only hatchback from this French company, could see a price reduction of approximately ₹40,000 following the GST rate changes.

Hyundai Creta

The Creta, one of India's most popular SUVs, will now fall under the 40% GST bracket, compared to the previous 43% tax (28% GST and 15% cess). Its price will decrease, benefiting customers.

Mahindra Scorpio

Most variants of this SUV currently attract a 50% tax, comprising 28% GST and 22% cess. With the elimination of the cess, the Scorpio will now attract 40% GST. This will lead to a price reduction.

Toyota Innova Crysta

Similar to the Scorpio, the Toyota Innova Crysta attracted 28% GST and 22% cess, resulting in a total tax of 50%. This popular car will now attract 40% tax.

Mahindra Thar

This lifestyle SUV attracts a 45-50% tax. However, with the new GST regime, it will now attract 40% tax. This will result in lower prices.