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How Finance Ministers GST Will Affect Car Prices In India?

Mr. C.S. Sudheer | Posted On Tuesday, May 23,2017, 12:06 PM

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How Finance Ministers GST Will Affect Car Prices In India?



The cars we drive say a lot about us.

- Alexandra Paul

Working very hard and saving money for that dream car? Well, its popularly believed that GST could pour cold water on your dreams. Goods and Services tax, popularly known as GST, is one indirect tax, for the whole of India. GST is considered to be the biggest reform, since India got her independence.

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GST will come into effect from July 1st 2017. If you are looking to buy that new small car after July 1st 2017, you might well be disappointed. Small petrol cars will be taxed at 28% + 1% Cess. Small diesel cars will be taxed at 28% + 3% Cess. This could push the price of that dream small car...Higher, Right? That's what everyone's saying OR...Is there more to this?

Want to know how GST will affect the price of your dream car? Let's find out. Want to know more on tax planning? We at will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

See Also: GST Tax Rates In India

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What is the GST on Hybrid Cars?

A hybrid car looks to significantly improve mileage, reduce emissions and overcome the  shortcomings of an electric car. Before GST, Total Tax + VAT + Other levies was around 43%. Hybrid vehicles will attract GST tax of 28% + 15% cess.  So No Change here.

Manufacturers of Hybrid vehicles are very disappointed with so high a GST tax rate. They believe that the Government should have put hybrid cars in a lower GST Slab. Hybrid cars require a lot of investments in hybrid technology and systems to control emissions and reduce environment pollution. Do you think Hybrid cars should have fallen in a lower GST slab?


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What is the GST on Luxury Cars?

Looking to buy a luxury car? There's reason to smile. GST could bring down prices of luxury cars. Luxury cars are subject to very high taxes. Taxes are very high at 55%. After GST, luxury cars will be slotted in the 28% GST slab + 15% cess. Yes, your new luxury car will be taxed at only 43%, instead of a massive 55%. This 12% reduction in tax might make your luxury car a little cheaper.

So, your new luxury car will be a little cheaper after GST. Right?

How Finance Minister's GST Will Affect Car Prices In India?

A controversy.....Small cars will be costly after GST

Some media reports are carrying this message, Small cars will be costlier after GST. This news must have got you in a panic. The new small car you plan to buy in a few months, might get costly. What to do?

This news should make your heart feel a little lighter. The Finance Minister Arun Jaitley tells you...Don't believe all media reports you hear. Arun Jaitley tells the media .... Report responsibly. He says, "I saw a misleading report on small cars to cost more after GST."

Finance Minister Arun Jaitley says small cars will not be costly after GST

Finance Minister Arun Jaitley says that he too has read the misleading media reports that small cars will cost more. Small cars are currently taxed at 31% and 29%. After GST small cars will be taxed at 28% + 3% cess, 28% + 1% cess. So exactly the same rate has been maintained. How could small cars cost more?

Buy your dream small car before July 1st or buy it after July 1st, it's going to cost the same.                      

You can heave a big sigh of relief. Your dream small car will not cost more after GST. If you are looking to buy a luxury car, you might find its price coming down after GST. Be Wise, Get Rich.

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