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Buying a car? GST explained

  03 July,2017

As of now, its GST which seems to be the most talked about topic in India. From today onwards, it is applicable on all goods and services across India which would affect the prices of all goods that you use which also includes our favourite automobiles. Most of the people are in confusion whether this is the right to time to buy their car or do they have to increase their budget for their favourite car. This article will answer all those questions as we tell you what impact GST would have on different type of cars.

Q1. What is the impact of GST on entry level/hatchback /sedan petrol cars?

A1. All entry level, premium hatchbacks and sedans are going to become cheaper. Yes, the GST now makes all such petrol cars cheaper by 2.5% as their GST will be now 29% which was earlier 31.5%. This includes all petrol cars ranging from Nano, Alto, Kwid, WagonR, Swift, Baleno, Elitei20, Dzire, Polo etc. Basically all those cars which measure less than 4 meter in length and are powered by engines with a cubic capacity of less than 1200cc.

Q2. What is the impact of GST on entry level/hatchback /sedan diesel cars?

A2. Same as the petrol cars, all those cars which are less than 4 meter in length and are powered by diesel engines which are less than 1500cc will enjoy GST benefit of 2.25%. This list will include all diesel models such as Swift, Dzire, Baleno, Elitei20, Aspire, Ecosport, VitaraBrezza, Ameo, TUV300 etc. These cars will have a GST of 31% as opposed to earlier tax of 33.25%.

Q3. My car is less than 4 meter in length but has bigger petrol engine than 1200cc or a 1500cc diesel engine?

A3. Still your car will enjoy GST benefit but only by 1.7%. These cars will be AbarthPunto and Ford Ecosport 1.5L petrol.

Q4. What about cars like City, Ciaz, Altis, Superb, A3, A6, E-Class, S-Class, 3 series, 5series, Jaguar XE etc. Are they going to become any cheaper?

A4. Yes, they are now more cheaper that to buy a significant margin as the new GST applicable on cars measuring more than 4 meter in length and which are powered by more than 1.2L petrol and 1.5L diesel engines will attract new GST of 43% which is 8.6% less than before. Surely, now you can buy the top variant instead of mid variant with the new prices.

Q5. I wanted to buy an SUV, are they also cheaper now?

A5. Yes and not only two types of SUV as they were earlier categorized. With GST all SUVs come under one taxation slab of 43% which makes them cheaper by 12%. In-fact, it———s the SUVs which get the biggest benefit from GST and are surely expected to become even more popular now in India. This list will include Creta, XUV500, Fortuner, X3, Q5, GLE, XC90 and all other SUVs available in our market which are more than 4 meter in length and have higher ground clearance depending upon their length and engine capacity.

Q6. If electric cars are my choice, do I get any benefit?

A6. Of-course, you can buy E2O or eVerito at reduced prices as with 12% GST, you will be paying around 8.5% less than before.

Q7. I want to reduce my carbon footprint by buying hybrid car; any changes post GST?

A7. There is change but unfortunately that does not encourage your decision. Post GST, hybrid are the only cars which are now more expensive than before. The decision comes as a surprise as hybrid cars are already expensive and the increased GST of 43% makes these cars even more costly by 12.7%. This will affect cars such as Camry hybrid, Prius, Accord etc.

Overall GST proves to be beneficial for majority of people looking forward to buy new cars apart from those who will choose hybrid cars. Rest for all, this is a perfect time to buy the new cars.

Words- Sunil Kumar

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