Concluding the first day of the 56th GST Council meeting, Finance Minister Nirmala Sitharaman announced the revised GST slabs for all commodities, citing a sigh of relief for the middle class of the country.
The GST slabs for cars, motorcycles, and automotive components are rejigged, making small cars and motorcycles below 350cc cheaper with reduced tax. The new tax slabs will come into effect from September 22. But what all has got cheaper and expensive? Let’s find that out in this read.
Small Cars Now Taxed At 18%
Earlier, small cars were taxed at 28 per cent, but with the new reform, they will now enjoy a lower tax slab of 18 per cent. Resultantly, making them cheaper by a fair margin. For example, the Maruti Suzuki Swift and Dzire will now get cheaper by roughly Rs 60,000 with reduced GST slabs.
What Is A Small Car?
Cars that measure under 4 meters in length and displace less than 1,200 cubic centimetres in their petrol guise or 1,500 cubic centimetres in their diesel guise. Common examples include – Alto, WagonR, Amaze, Swift, Dzire, Nexon, Venue and more. In fact, the diesel-RWD variant of the Mahindra Thar falls under this category. However, the Maruti Suzuki Brezza, being a sub-4m car, fails to be a small car as it gets a larger 1.5L petrol engine.
Motorcycles Below 350cc Get Cheaper
Motorcycles that are powered by an engine displacing less than or equal to 350cc now boast of a reduced GST slab. Earlier it stood at 28 per cent, but has now been brought down to 18 per cent. Subsequently, models like the Hero Splendor, Bajaj Platina, and Royal Enfield Bullet 350 get marginally cheaper now.
Motorcycles Over 350cc Get Expensive
On the flip side, motorcycles that displace any volume over 350cc will now be taxed at 40 per cent. They were earlier taxed at 28 per cent, along with an additional cess of 3 per cent. With the cess being scrapped, the final tax slab stands at 40 per cent for big bikes, putting them in the same sin good category as tobacco and alcohol.
No Change In GST For Electric Vehicles
The tax slabs for the electric vehicles remain unchanged at 5 per cent. This move will certainly be celebrated by the OEMs and also help the government in promoting green mobility. Even the luxury EVs will be taxed at 5 per cent.
Three-Wheelers, Trucks, Buses, Ambulances Now Taxed At 18%
In a bid to offer relief to last-mile and first-mile mobility, the taxation for trucks, buses, ambulances, and three-wheeler vehicles is also altered. They will now be taxed at 18 per cent, enjoying a 10 per cent drop from the earlier 28 per cent slab.
Auto Parts Remain At 18%
Auto components were earlier spread across different tax brackets, but are now unified under the 18 per cent bracket, making it easier for manufacturers’ compliance.