GST Car Price: With the implementation of the new GST 2.0, a new revolution has begun in India’s automobile sector. The reduction in GST rates has led to a significant drop in car prices, directly impacting sales. During the festive season, especially on the first day of Navratri, companies like Maruti Suzuki, Hyundai, and Tata Motors sold a record number of cars, breaking all previous years’ records. This historic move has brought the dream of owning a car much closer for the middle class.
GST 2.0 and Its Impact on Car Prices
The government has recently introduced major changes to the GST system, known as GST 2.0. Previously, cars were taxed at around 28% to 50% including multiple tax slabs and cesses, which has now been significantly reduced. According to the new rules:
- Small Cars: For petrol cars under 1200cc and diesel cars under 1500cc, the GST has been reduced to a flat 18%, down from the previous rate of about 28-30%.
- Luxury Cars: The tax burden has also been eased for large and luxurious cars. The tax has been reduced to 40% from the earlier rate of nearly 50%.
- Electric Vehicles (EV): To promote environmentally friendly vehicles, the government has kept the GST on electric cars at just 5%.
This tax reduction has significantly lowered the ex-showroom prices of cars. For example, customers can now get a discount of around ₹75,000 on a car like the Maruti Swift, over ₹1 lakh on a Hyundai Creta, and up to ₹1.5 lakh on a Tata Nexon.
Sales Explosion During the Festive Season
The decision to reduce GST was made at a time when the festive season is underway in India. Indians consider it auspicious to buy cars during festivals like Navratri and Diwali. About 25-30% of the country’s total car sales occur during this period. This government decision has become a “triple bonanza” for customers. On one hand, prices have dropped due to the GST cut; on the other, dealers are offering attractive discounts, and banks are providing easy financing options at 7-8% interest.
As a result, on the very first day of Navratri:
- Maruti Suzuki: Delivered more than 30,000 cars.
- Hyundai: Sold 11,000 cars, the highest single-day sale in the last five years.
- Tata Motors: Completed more than 10,000 car deliveries.
These three major companies alone sold over 50,000 new cars in a single day, which is a historic milestone for India’s automobile industry.
Impact on the Economy and Customers
The reduction in car prices has increased the purchasing power of middle-class families. Many are now considering upgrading from a two-wheeler to a four-wheeler. Those who owned small cars are now leaning towards compact SUVs.
This massive volume of sales has also had a positive impact on the stock market. The share prices of automobile companies like Maruti Suzuki and Tata Motors have increased, bringing smiles to investors’ faces. According to experts, if this trend continues, the car penetration rate in India could increase from 30 to 50 cars per 1000 people over the next five years. This is not just a major indicator for the automobile industry but also for the country’s overall economic growth.
