Prices of small cars, two-wheelers under 350cc, to come down significantly on GST cut; bigger cars in 40% slab

NEW DELHI: Car and SUV prices, especially those classified under the 4-meter small vehicles category (petrol under 1200cc and diesel under 1500cc), as well as two-wheelers under 350cc will see a price cut from Sep 22, as the GST Council meeting slashed the GST rate from 28% to 18%.


Even bigger cars and SUVs, many of which had GST rates around 50% due to higher cess, will see a rate cut as GST on them will come down to 40%.


However, the GST council did not fix any special rates for hybrids, in a setback to companies hybrid models from Maruti, Toyota and Honda.



Finance Minister Nirmala Sitharaman said that the decision was taken in order to give relief to the common man.


The GST cut rates will benefit companies such as Marutui, Hyundai, Tata Motors, and Renault while in two-wheelers, companies such as TVS and Honda Motorcycle and Scooter India will gain. Luxury cars makers like Mercedes and BMW will also benefit with the GST coming down to the new slab of 40%.


Royal Enfield, however, is a big loser as there is no cut in GST on bikes above 350cc.


Sitharaman said the new rates will come into effect from September 22.


Buses, trucks, 3-wheelers and ambulances will also see a reduction in prices as GST has come down from 28% to 18%.