The government is considering simplifying the GST structure and reducing tax rates, which could bring significant price relief for small and mid-size cars.
Buyers planning to purchase cars like Hyundai Creta, Venue, Exter, and i20 this Diwali may benefit from this move.
How Small Cars Will Benefit
Currently, small cars and hatchbacks carry 28% GST plus 1% cess, making the effective tax about 29%. If GST is reduced to 18%, customers could save roughly 10% of the car’s price.
For example:
- A car priced at Rs 5 lakh currently costs Rs 6.45 lakh with taxes. After GST reduction, it could drop to around Rs 5.90 lakh, saving about Rs 55,000.
Expected Price Reduction on Popular Models
| Car Model | Current Price | Estimated GST Saving | Price After GST Cut |
|---|---|---|---|
| Hyundai Exter | Rs 5,99,900 | Rs 59,990 | Rs 5,39,910 |
| Hyundai i20 | Rs 7,50,900 | Rs 75,000 | Rs 6,75,900 |
| Hyundai Venue | Rs 7,94,100 | Rs 79,400 | Rs 7,14,700 |
| Hyundai Creta | Rs 11,10,900 | Rs 1,11,000 | Rs 9,99,900 |
Who Will Benefit the Most
This reduction will mainly help middle-class buyers looking to purchase new cars, especially hatchbacks and compact SUVs. Savings could range from Rs 60,000 to Rs 1.1 lakh depending on the model.
With GST reforms expected to simplify tax slabs, Diwali could bring an affordable car shopping opportunity for many families.