Car Prices Could Go Down by a Whopping 12-15% If GST is Implemented

2015 Tata Safari Storme-Test Drive Review

Car Prices Could Go Down as much as 32% to 17% if the GST is implemented as manufacturer would pay a lot less tax and pass benefits to customers

Car Prices Could Go Down significantly if the government get the GST bill approved in the Parliament which is the talk of the town right now as we speak. The appointed panel’s recommendation of a standard tax rate of 17-18 per cent for most goods and services is accepted. Something which applies to automobiles as well.

Manufacturers who makes their cars in India have heavy taxes right from the assembly till the factory gates. The rates which currently stand at 30-50 per cent taxes on cars, will go down like anvil. Manufacturer are most likely to pass most, not all, the benefits of lower taxes to consumers.

Mercedes Benz S500 Local Production (2)

The automobile sector is one of the sector which could benefit significantly from GST. Only if the government accepts the recommendations of the GST panel, and makes automobiles get into the general category of standard goods and services with a rate of 17-18 per cent we could see the car manufacturer pockets so heavy they would be clearly pass benefits everyone who comes in their way.

For example, small cars which have the length of less than 4 metres and diesel engine size below 1500 cc and 1200cc petrol engine are currently taxed at 30.4%. That 30.4% which includes an excise duty of 12.5%, central sales tax of 2%, and something called national calamity contingent duty of 1% and then last but not the least, VAT, of 12.5%. Once the god given GST comes into effect, manufacturers will just end up paying 17-18% on small cars, which could bring down prices by 12 per cent to 13 per cent.

Renault Kwid vs Maruti Alto k10-13

GST takes all taxes together and brings the original percentage down and then also again it makes those prices as standard in all states around the country. Yes, this is thing is as big as the day this nation got its freedom and constitution. A standard rate of 17% would mean that prices could come down by over 10%. Remaining 3% will be adjusted in state wise is what was proposed earlier. Imagine, Rs. 60,000 off on the Maruti Swift’s base price!


The benefits of GST will apply to both luxury and small cars. However, GST is planning to propose a 40% slab on them under GST. Right now Sedans over four meters and SUV’s are taxed at 44.5% and 52% respectively. Once GST is a go, prices of luxury sedans could automatically come down by 4-5%, while prices of SUVs tax slab can go down 10-12%. Too wit, GST for the automobile stands GOD SENT TAX-RATES.

Follow us on Facebook, Twitter & on Youtube