GST Impact: Honda City Price Will Increase by Considerable Margin


Increase in Honda City prices will come as a consequence of the new GST laws that are going to be effective from July 1 onwards

Honda City is a top selling sedan in the C segment for years now and it will have its price influenced by the new GST tax structure. Considering the existing price of the VMT Petrol variant at Rs. 10.12 lakh (ex-showroom, New Delhi) and the inclusion of 43 percent cess by the new rules, the proposed GST rates could increase the price by around Rs. 11,000.

The Japanese manufacturer launched the facelifted City a few months ago and has its top-end being stretched to a higher price range due to the inclusion of several premium features. However, it retained its engine line-up with the tried and tested units doing the regular duties.

Also Read: New 2017 Honda City Facelift Facelift Launched in India


The 1.5-litre naturally-aspirated V-TEC petrol engine produces 120 hp power and 140 Nm of peak torque, and comes mated with a five-speed manual or a CVT gearbox. The 1.5-litre turbodiesel engine makes 100 hp and 220 Nm of torque connected to a five-speed manual transmission.

Under the new GST tax structure, automobiles will attract 28 percent tax with cess in 1 to 15 percent range based on the length and the engine in which the vehicle is powered with. The gasoline medium of cars stretching below four metres in length and has engine capacity less than 1,200 cc gets 1 percent cess and diesel cars below 1,500 cc will come with 3 percent cess.

Also Read: 40% of 2017 Honda City Bookings are for Top-End ZX Variant


Larger vehicles with engine capacity of above 1,500 cc and length measuring more than four metres will be subjected to a total of 15 percent cess. Some of the brands like Audi, BMW, Ford Isuzu, Jaguar Land Rover and Mercedes-Benz have reacted in the wake of GST to pass on the benefits to customers with immediate effect, mostly on limited availability of stock before the rules come into existence from July 1 onwards.
Proposed GST Calculation:

Ex-showroom New Delhi price – Rs 10,12,797
As Octroi is not levied in Delhi, the ex-showroom price of Honda City VMT Petrol we are assessing here has the tax added up to 41.5% with excise, VAT and infra cess included.
The ex-factory price of the City sedan = Rs 7,15,757
Now, instead of existing 41.5 percent tax, the City will attract 43 per cent under new GST regime.
Ex-showroom price of the Honda City VMT Petrol post proposed GST = Rs 10,23,532

Increase in price = Rs 10,735

Current Tax – 24% Excise + 12.5 Vat + 4% infra Cess
Proposed – 28% + 15% cess = 43%
Expected rise in price – 1.5%