Small is big: Cars with up to 1.2L engine, bikes under 350cc to cost less after GST rejig

NEW DELHI: Car and SUV prices, especially those classified under the four-metre small vehicles category (petrol under 1,200cc and diesel under 1,500cc), as well as two-wheelers under 350cc will see a price cut from Sept 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 tax on them will come down to 40%.

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However, the GST council did not fix any special rates for hybrids. 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 Maruti, Hyundai, Tata Motors, and Renault while in two-wheelers, companies, such as TVS and Honda Motorcycle and Scooter India will gain. Luxury car 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.


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