With GST coming into force from today, you can expect variation in the price of certain commodities. GST subsumes excise, VAT, infra cess, NCCD, CST etc. Cars, as expected, would also see an impact on final sale price due to the change in overall tax rate. So, which cars would be cheaper to buy, we’ve made a list.
In case of small cars, contrary to what we believed, the prices have reduced by Rs 6,500-15,000 since the effective tax rate has changed from 31.4% to 29%.
Mid-size category of vehicles, which includes cars like Vento, City, Ciaz, Verna etc. will also be cheaper by about Rs 30,000 due to change in rate from 46.6% to 43%. Tax rates for luxury cars have changed from 51.8% to 43%. Therefore, luxury cars like Jaguar XE, Mercedes-Benz C Class, S Class etc. would see a drop of around Rs 1,25,000 to 7,00,000 (see the list for the expected price drop range).
It’s probably the best news of the year for people who wish to purchase SUV in coming months as this class of cars would see a drop of 12.3% in rates and effective tax rate would reduce from 43% to 55.3%.
In the previous tax regime Hybrids and Micro-hybrids received tax benefit, it has ceased to be the case and this has made Hybrids expensive, The applicable tax rate has been changed from 30.3% to 43%.