Looking to buying a bike/car but confused about what the new Goods and Services Tax (GST) means for you? Here is a quick lowdown on all you need to know to make the best choice for yourself.
Current Tax Laws on Automobiles
Table showing the different types and rate of taxes levied on the passenger vehicles/SUV.
|Segment||Excise||*Nccd +auto cess||VAT||*Roadtax||*Motor vehicle tax||Total||CGST||SGST||TOTAL||Difference|
|Small Cars <1200cc||12.50%||1.1%||14%||State based||State based||28%(approx)||9%||9%||18%||10%|
|Mid-SizeCars from 1200cc to 1500cc||24%||1.1%||14%||State based||State based||39%||9%||9%||18%||21%|
|Luxury Cars>1500cc||27%||1.1%||14%||State based||State based||42%||14%||14%||28%||14%|
|SUV’s >1500cc, >170mm ground clearance||30%||1.1%||14%||State based||State based||45%||14%||14%||28%||17%|
GST promises to simplify transactions in the two-wheeler sector. For the purposes of GST, two wheelers have been divided into two categories – those with engine capacity below 350cc, and that above 350cc.
Under the GST regime, two-wheelers below 350cc are set to become cheaper. Earlier, such two-wheelers were taxed at 30 percent and included a wide range of charges, including VAT, education cess, Krishi Kalyan cess, green cess etc.
Must check: Goods & Services Exemptions Under GST
Now, these vehicles will see reduced taxation at 28 per cent. Two-wheelers that fall into this category include the country’s largest-selling scooter Honda Activa, and bikes like Bajaj Pulsar 220, and Royal Enfield Bullet 350.
To further elaborate with an example, a Honda Activa 125 Standard used to cost Rs 57,001 out of a Delhi showroom till June 30. This included the 30 percent tax in the previous tax regime. From now, its price is set to go down to around Rs 56,124. By paying 2 per cent less as tax, one saves Rs 877.
The second category of two-wheelers, those above 350cc, also saw a similar 30 per cent tax earlier. Post-GST, the tax will fall to 28 percent and an additional cess of 3 per cent will be levied. This will take the total tax to 31 percent – one percent over what one would pay pre-GST.
For more updates on “Impact of GST on Automobiles – Cars & Two Wheelers”, keep browsing our site.