GST: A Bumpy Ride Or An Easy Ride - Fresh Cess Beats | ET Autolytics

GST: A Bumpy Ride Or An Easy Ride

The Goods and Services tax came into effect from 1 of July 2017. Many automotive companies like Hyundai, Mahindra, BMW, Audi, Mercedes-Benz and Jaguar announced special offers on their cars calling it the pre-GST discount.

According to the rate structure finalised by the GST Council, all cars attracted a peak GST of 28 per cent, while small petrol cars with engine less than 1,200 cc attracted 1 per cent cess, that with a diesel engine of less than 1,500 cc attracted 3 per cent cess. Large cars with engine greater than 1,500 cc, and SUVs with length more than 4 meters and engine greater than 1,500 cc attracted a cess of 15 per cent.

The GST Council, in its meeting held on 9 September, hiked the cess on mid-sized cars (engine 1500cc) by 5 per cent and that for SUVs by 7 per cent. This takes the total tax incidence on these cars to 45 per cent, 48 per cent and 50 per cent, respectively, and lead to 1-4 per cent price hike.

Car companies such Honda, Toyota, Fiat and Hyundai increased their car prices after the increase in the GST Cess by the government.

With effect to this, Hyundai Motor Indian discontinued its sole 7-seater SUV Santa Fe due to low sales from the Indian market.

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