The Goods and Services Tax rollout on July 1 has prompted the automobile manufacturers to revise the prices of their vehicles according to the new tax structure. So, are you planning to buy a car? Here is a definitive guide on how the new tax regime will impact automobile sector and what are the changes in prices for popular brands and vehicles.
Under the new tax regime, cars are taxed at 28% GST with an additional cess ranging between 1 and 15 per cent. Cars with petrol engines less than 1,200 cc will be liable for 1% cess and cars with diesel engines less than 1,500 cc will be imposed with 3% cess. Big cars that have engines over 1,500 cc and those SUVs that are over four metres in length, will be charged with 15% cess in addition to the 28% GST levy. The levy for hybrid vehicles will be same.
Levy on electric vehicles is fixed at 12%. The tax incidence on cars earlier used to fluctuate between 28 and 45 per cent. However, the maximum levy applicable now will be 43%. The categories, buyers will be looking at essentially, will be small cars, large cars, electric vehicles and hybrid vehicles. The automobile sector has seen a drop in the taxation structure ranging anywhere between 2.25 and 12 per cent. Therefore, the sector is unlikely to get any significant change in demand.
Leading automobile manufacturer Maruti Suzuki India has reduced prices of most of its offerings by up to 3%. Alto has seen a price cut of around Rs 2,000-Rs 5,000. The WagonR price has been cut by Rs 5,000-Rs 8,300. The Swift has been made cheaper by Rs 6,700-Rs 10,700.
The company has also dropped prices of its sedans. The Baleno has been cut by around Rs 6,600-Rs 13,100. The highest selling sedan right now, Swift Dzire, has seen a price cut of Rs 8,100- Rs 15,100.
The price of Vitara Brezza has been cut by Rs 10,400-Rs 14,700 and the S-Coss by Rs 17,700-Rs 21,300. The Ertiga Petrol has been made cheaper by Rs 21,800 while the Ciaz petrol has been made cheaper by Rs 23,400. There is a drawback for the buyers of the Ciaz and Ertiga hybrid models as they have become costlier on account of withdrawal of concessions of tax under GST. The diesel variants of the mild hybrid vehicles saw a hike of as much as Rs 1 lakh.
The second most popular small car manufacturer in India has cut prices of its small cars by around Rs 8,000-Rs 24,000. The cars include Eon, Grand i10, Elite i20, Xcent and i20 Active. The higher cuts were seens in sedans. The Verna and Elantra saw a price cut of around Rs 27,000-Rs 70,000. The SUVs offered by the company–Creta, Tucson and Santa Fe–have been made cheaper by around Rs 1 lakh to Rs 2.5 lakh.
The small car section of the company saw a drop between Rs 5,000 and Rs 21,000. The offerings in this section include Nano, Tiago, Zest, Indica, Bolt, Tigor and Indigo. The bigger drop in prices were given to the Sumo, Safari and Hexa offerings of around Rs 80,000-Rs 1,60,000.
Honda Cars India
The company cut prices of WR-V, Amaze, Jazz and Brio by upto Rs 24,000. The City’s price has been cut by Rs 31,000 and the CR-V has become cheaper by up to Rs 2.3 lakh.
Etios and Corolla have been made cheaper by up to Rs 57,000. While the high-in-demand Fortuner and the Land Cruiser prices have been cut by a jaw-dropping range of Rs. 3 lakh to Rs. 10.5 lakh.
Mahindra and Mahindra
The price for the KUV100, TUV300 and Verito Vibe has been reduced up to Rs 36,000.
Kwid and Pulse have been made cheaper by up to Rs 17,000. The cross-over Duster can now be bought up to Rs 1 lakh cheaper than before.
The price cut for Micra and Micra Active is up to Rs 11,000 and the Sunny is down by Rs 32,500. Nissan’s SUV offering Terrano has got a drop of Rs 1.2 lakh.
The prices for Polo, Ameo and Polo GT are cut by up to Rs 22,000 now. Sedans of Volkswagen like Vento and Jetta are cheaper by up to Rs 75,000 now. The Tiguan SUV is cheaper by Rs 3.3 lakh.
The Figo, its Aspire variant, EcoSport drop prices marginally by up to Rs 13,000. However, the Endeavour SUV sees a drop of Rs 2.7 lakh.
The luxury car manufacturer has offered price cuts of upto Rs 7 lakh for its vehicles.
One of Mercedez-Benz’s biggest competitors in the luxury sedan market in India, BMW has dropped prices up to Rs 4 lakh.
The price drop in Audi’s offerings has been similar to BMW and its looks to take on BMW and Mercedes Benz in the luxury sedan and luxury SUV market.
The Jaguar has dropped prices upto Rs 6 lakhs on its offerings like the XE, XF and XJ.