Effect of GST on Automobile Prices in India

GST has been one of the hot topic of discussions in the past one month or so. GST which stands for Goods & Service Tax is a way of implementing a uniform tax structure across the whole of India. Right from medicines, food items to automobiles; have seen a change in price with the implementation of the GST. Coming to automobile prices, there was a lot of confusion within buyers. They were in a dilemma whether to buy their vehicles before or after the implementation of the GST. Now, that the GST has been implemented successfully the picture is a bit more clear. Let’s put some more light on it.
How has GST effected car prices?
Now since GST means a more unified tax structure across the country, car manufacturers will be able to manage to keep the price of a car more uniform across the country. So, the ex showroom price of a particular vehicle will remain the same throughout the country. However, GST does not include state level taxes like the road tax etc. This means that even though the ex showroom price of a vehicle will remain same throughout the country; the on road price will still vary. The passenger cars now fall under the 28% GST slab. An additional 1 to 3 % cess would be applicable. The change in the prices of small and mid segment cars would be negligible. The luxury cars would also come under the 28% slab. However, the cess applicable on them would be 15%. Luxury cars have got more cheaper after the implementation of the GST. These taxes are lesser as compared to earlier. Hence the luxury cars have seen a reduction of prices.
All in all, there hasn’t been a major change in the prices of small and mid sized cars. However, the good news is for the luxury car buyers which have become cheaper now.
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