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Highlight vehicle price drop post-GST rationalisation across dealerships: Centre tells automakers
Last week, the Centre slashed GST on small cars and two-wheelers up to 350cc from 28% to 18%, aiming to make vehicles more affordable and stimulate demand
Despite being the world’s third-largest car market, India’s car penetration remains low at 32–34 cars per 1,000 people.
The Ministry of Heavy Industries (MHI) has directed carmakers and two-wheeler manufacturers to display posters comparing old and new vehicle prices after the recent GST rationalisation. According to a Business Standard report, the ministry has also asked that these posters carry photographs of Prime Minister Narendra Modi. Executives at auto companies are now designing the posters and seeking approval from the ministry, the report added. Storyboard18 could not independently verify this.
Last week, the Centre slashed GST on small cars and two-wheelers up to 350cc from 28% to 18%, aiming to make vehicles more affordable and stimulate demand.
The ministry said, “Bikes are the primary mode of transport in rural and semi-urban India; cheaper bikes will directly benefit farmers, small traders, and daily wage earners.” It added that the cut would also support gig workers by reducing their EMIs and ownership costs.
Several popular small car models now fall under the 18% GST slab, including Tata’s Nexon, Altroz, Punch, Tigor and Tiago; Maruti Suzuki’s Alto K10, S-Presso, WagonR, Eeco, Baleno, Fronx, Dzire, Swift, and Celerio; Hyundai’s Grand i10, Aura, i20, Venue; Mahindra’s XUV 3XO; Kia’s Sonet and Syros; Toyota’s Glanza and Taisor; Honda’s Amaze; Renault’s Kwid, Kiger, Magnite and Triber; and Skoda’s Kushaq.
The GST Council defines a small car as one under four metres, with petrol/CNG/LPG engines below 1,200cc and diesel engines below 1,500cc. Cars exceeding these specifications will now attract 40% GST.
This higher slab covers models such as Maruti Suzuki’s Brezza, Ertiga, Grand Vitara, Invicto, Jimny and XL6; Mahindra’s Bolero, Scorpio Classic, Scorpio N, XUV 700, Thar and Thar Roxx; Hyundai’s Verna, Creta, Alcazar and Tucson; Tata’s Curvv, Harrier and Safari; Kia’s Seltos, Carens, Clavis and Carnival; Toyota’s Rumion, Innova Crysta, HyCross, Fortuner and Hyryder; MG Motor’s Astor, Gloster and Hector; Honda’s City, City Hybrid and Elevate; Renault’s X-Trail; and Skoda/Volkswagen’s Taigun, Slavia, Kodiaq, Virtus, Tiguan and Golf GTI.
Previously, cars longer than four metres attracted 50% tax (28% GST plus 22% cess). The cess has now been removed, with a simplified 40% GST applied instead. “Removal of the additional cess has not only reduced the rates but also makes taxation simple and predictable,” the ministry noted.
GST on EVs remains unchanged at 5%, while most auto components now fall under the 18% slab. Despite being the world’s third-largest car market, India’s car penetration remains low at 32–34 cars per 1,000 people.
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