Influence of GST On Car Prices In India
India is eventually on the brink of having a simplified taxation system. But before the Goods & Service Tax (GST) comes into effect on July 1, two thousand seventeen (proposed), and substitutes numerous state and central taxes with a single levy, let's attempt to figure out how it will influence car prices in India.
As of May Nineteen, 2017, it's certain that cars will fall under the 'luxury' bracket and will attract a twenty eight per cent vapid GST. Over and above, an extra cess of 1, three or fifteen per cent is proposed depending on the classification of cars.
Since the implementation of GST is round the corner, the chances are high that the proposed extra cess will be a reality. If the current classification of cars is carried over (high probability), there will be four broad categories of cars:
1. Petite cars – Cars under four-metre length powered by a petrol engine not greater than 1.2-litre or a diesel engine not greater than 1.5-litre by displacement
Two. Mid-size cars – Cars over four-metre length powered by either a petrol or a diesel engine not greater than 1.5-litre displacement
Trio. Luxury cars – Cars over four-metre length powered by either a petrol or a diesel engine that is greater than 1.5-litre displacement
Four. SUVs – Cars over four-metre length and 170mm ground clearance powered by either a petrol or a diesel engine that is greater than 1.5-litre displacement
Here's a comparison of the current tax levied on these cars and proposed GST in comparison:
Break-up of existing taxes mentioned in Table – A is as under in Table – B:
Readers note – Ex-showroom price of a car is inclusive of all these taxes. VAT is applied over and above every other tax. As a result, the total tax will actually be higher than what we are assuming. Also, Green Cess and Octroi is charged in select states. The lower tax percentage is the minimum of all possibilities while the higher tax percentage is the maximum. Registration charges and insurance are not included in the ex-showroom price. VAT is charged at different rates in different states.
Before we take an example of a car; going by Table A, it is clear that in the case of petite cars (both petrol and diesel) GST will end up enlargening prices. However, that may not hold true for all those states that charge Octroi, for example, Maharashtra.
1. Petite car petrol category – Renault Kwid RXL 0.8
Ex-showroom, Fresh Delhi price – Rs Three,32,312
Since Octroi is not levied in Delhi, the ex-showroom price of Kwid RXL 0.8 includes excise, VAT and infra cess, which toughly adds up to twenty six per cent.
So, the ex-factory price of the Kwid = Rs Two,63,739
Now instead of twenty six per cent that is charged presently, the Kwid will attract twenty nine per cent GST.
Ex-showroom price of the Kwid RXL 0.8 post proposed GST rates = Rs Trio,40,223
Increase in price = Rs 7,911
Two. Puny car diesel category – Maruti Suzuki Dzire Vdi AGS
Ex-showroom Fresh Delhi price – Rs 7,76,000
Since Octroi is not levied in Delhi, the ex-showroom price of Maruti Suzuki Dzire Vdi AMT includes excise, VAT and infra cess, which harshly adds up to 27.50 per cent.
So, the ex-factory price of the Dzire = Rs 6,08,627
Now instead of 27.Five per cent that is charged presently, the Dzire will attract thirty one per cent GST.
Ex-showroom price of the Maruti Suzuki Dzire Vdi AGS post proposed GST rates = Rs 7,97,301
Increase in price = Rs 21,301
Three. Mid-size cars category – Honda City VMT Petrol
Ex-showroom Fresh Delhi price – Rs Ten,12,797
Since Octroi is not levied in Delhi, the ex-showroom price of Honda City VMT Petrol includes excise, VAT and infra cess, which harshly adds up to 41.50 per cent.
So, the ex-factory price of the City = Rs 7,15,757
Now instead of 41.Five percent that is charged presently, the City will attract forty three per cent GST.
Ex-showroom price of the Honda City VMT Petrol post proposed GST rates = Rs Ten,23,532
Increase in price = Rs Ten,735
Four. Luxury cars category – BMW 320d Luxury Line
Ex-showroom Fresh Delhi price – Rs 42,70,000
Since Octroi is not levied in Delhi, the ex-showroom price of BMW 320d Luxury Line includes excise, VAT and infra cess, which harshly adds up to 44.50 per cent.
So, the ex-factory price of the 320d = Rs 29,55,017
Now instead of 44.Five per cent that is charged presently, the 320d will attract forty three per cent GST.
Ex-showroom price of the BMW 320d Luxury Line post proposed GST rates = Rs 42,25,674
Decrease in price = Rs 44,326
Five. SUVs category – Toyota Fortuner 4×4 AT diesel
Ex-showroom Fresh Delhi price – Rs 31,86,000
Since Octroi is not levied in Delhi, the ex-showroom price of Toyota Fortuner 4×4 Automatic diesel includes excise, VAT and infra cess, which harshly adds up to 48.50 per cent.
So, the ex-factory price of the Fortuner = Rs 21,45,454
Now instead of 48.Five per cent that is charged presently, the Fortuner will attract forty three per cent GST.
Ex-showroom price of the Toyota Fortuner 4×4 AT diesel post proposed GST rates = Rs 30,68,000
Decrease in price = Rs 1,Legal,000
The five examples above clarify that the most affected segment post GST in India could be the 'petite car diesel' category. The mid-size sedan and puny car petrol categories will also be negatively affected. On the flipside, luxury cars and high-end SUVs may end up being priced lower than what they presently are.
So, if you were planning a diesel hatchback or a sub-4m sedan, it's very likely the right time to go ahead and make a purchase before GST rolls out. We've also heard that some dealers want to liquidate their existing stock quicker than usual to keep their balance sheets clean and not risk their input tax credit. If that's true and you're fortunate, you may even get a good bargain.
For those who had set their eyes on a luxury car or a big SUV, just drape on for some more time to get more clarity on GST. Going by the anti-diesel sentiment, the government may find a reason to at least match the current prices of the SUVs and luxury cars. However, if that doesn't happen and prices drop, you may end up regretting an early purchase.
Also, worth noting is the fact that hybrids haven't been talked about as yet. While lower tax rates for electrified cars are in place, hybrid cars like Maruti Ciaz SHVS, Toyota Prius and Camry hybrid that presently love 12.Five per cent excise duty instead of twenty four per cent or twenty seven per cent may end up getting more expensive. So, it's the best time to get home these fuel-efficient hybrid cars because they may not remain as lucrative a buy afterwards.
Influence of GST On Car Prices In India
Influence of GST On Car Prices In India
India is ultimately on the brink of having a simplified taxation system. But before the Goods & Service Tax (GST) comes into effect on July 1, two thousand seventeen (proposed), and substitutes numerous state and central taxes with a single levy, let's attempt to figure out how it will influence car prices in India.
As of May Nineteen, 2017, it's certain that cars will fall under the 'luxury' bracket and will attract a twenty eight per cent plane GST. Over and above, an extra cess of 1, three or fifteen per cent is proposed depending on the classification of cars.
Since the implementation of GST is round the corner, the chances are high that the proposed extra cess will be a reality. If the current classification of cars is carried over (high probability), there will be four broad categories of cars:
1. Puny cars – Cars under four-metre length powered by a petrol engine not greater than 1.2-litre or a diesel engine not greater than 1.5-litre by displacement
Two. Mid-size cars – Cars over four-metre length powered by either a petrol or a diesel engine not greater than 1.5-litre displacement
Trio. Luxury cars – Cars over four-metre length powered by either a petrol or a diesel engine that is greater than 1.5-litre displacement
Four. SUVs – Cars over four-metre length and 170mm ground clearance powered by either a petrol or a diesel engine that is greater than 1.5-litre displacement
Here's a comparison of the current tax levied on these cars and proposed GST in comparison:
Break-up of existing taxes mentioned in Table – A is as under in Table – B:
Readers note – Ex-showroom price of a car is inclusive of all these taxes. VAT is applied over and above every other tax. As a result, the total tax will actually be higher than what we are assuming. Also, Green Cess and Octroi is charged in select states. The lower tax percentage is the minimum of all possibilities while the higher tax percentage is the maximum. Registration charges and insurance are not included in the ex-showroom price. VAT is charged at different rates in different states.
Before we take an example of a car; going by Table A, it is clear that in the case of petite cars (both petrol and diesel) GST will end up enhancing prices. However, that may not hold true for all those states that charge Octroi, for example, Maharashtra.
1. Puny car petrol category – Renault Kwid RXL 0.8
Ex-showroom, Fresh Delhi price – Rs Three,32,312
Since Octroi is not levied in Delhi, the ex-showroom price of Kwid RXL 0.8 includes excise, VAT and infra cess, which toughly adds up to twenty six per cent.
So, the ex-factory price of the Kwid = Rs Two,63,739
Now instead of twenty six per cent that is charged presently, the Kwid will attract twenty nine per cent GST.
Ex-showroom price of the Kwid RXL 0.8 post proposed GST rates = Rs Trio,40,223
Increase in price = Rs 7,911
Two. Petite car diesel category – Maruti Suzuki Dzire Vdi AGS
Ex-showroom Fresh Delhi price – Rs 7,76,000
Since Octroi is not levied in Delhi, the ex-showroom price of Maruti Suzuki Dzire Vdi AMT includes excise, VAT and infra cess, which toughly adds up to 27.50 per cent.
So, the ex-factory price of the Dzire = Rs 6,08,627
Now instead of 27.Five per cent that is charged presently, the Dzire will attract thirty one per cent GST.
Ex-showroom price of the Maruti Suzuki Dzire Vdi AGS post proposed GST rates = Rs 7,97,301
Increase in price = Rs 21,301
Trio. Mid-size cars category – Honda City VMT Petrol
Ex-showroom Fresh Delhi price – Rs Ten,12,797
Since Octroi is not levied in Delhi, the ex-showroom price of Honda City VMT Petrol includes excise, VAT and infra cess, which harshly adds up to 41.50 per cent.
So, the ex-factory price of the City = Rs 7,15,757
Now instead of 41.Five percent that is charged presently, the City will attract forty three per cent GST.
Ex-showroom price of the Honda City VMT Petrol post proposed GST rates = Rs Ten,23,532
Increase in price = Rs Ten,735
Four. Luxury cars category – BMW 320d Luxury Line
Ex-showroom Fresh Delhi price – Rs 42,70,000
Since Octroi is not levied in Delhi, the ex-showroom price of BMW 320d Luxury Line includes excise, VAT and infra cess, which toughly adds up to 44.50 per cent.
So, the ex-factory price of the 320d = Rs 29,55,017
Now instead of 44.Five per cent that is charged presently, the 320d will attract forty three per cent GST.
Ex-showroom price of the BMW 320d Luxury Line post proposed GST rates = Rs 42,25,674
Decrease in price = Rs 44,326
Five. SUVs category – Toyota Fortuner 4×4 AT diesel
Ex-showroom Fresh Delhi price – Rs 31,86,000
Since Octroi is not levied in Delhi, the ex-showroom price of Toyota Fortuner 4×4 Automatic diesel includes excise, VAT and infra cess, which harshly adds up to 48.50 per cent.
So, the ex-factory price of the Fortuner = Rs 21,45,454
Now instead of 48.Five per cent that is charged presently, the Fortuner will attract forty three per cent GST.
Ex-showroom price of the Toyota Fortuner 4×4 AT diesel post proposed GST rates = Rs 30,68,000
Decrease in price = Rs 1,Legitimate,000
The five examples above clarify that the most affected segment post GST in India could be the 'puny car diesel' category. The mid-size sedan and puny car petrol categories will also be negatively affected. On the flipside, luxury cars and high-end SUVs may end up being priced lower than what they presently are.
So, if you were planning a diesel hatchback or a sub-4m sedan, it's very likely the right time to go ahead and make a purchase before GST rolls out. We've also heard that some dealers want to liquidate their existing stock quicker than usual to keep their balance sheets clean and not risk their input tax credit. If that's true and you're fortunate, you may even get a good bargain.
For those who had set their eyes on a luxury car or a big SUV, just suspend on for some more time to get more clarity on GST. Going by the anti-diesel sentiment, the government may find a reason to at least match the current prices of the SUVs and luxury cars. However, if that doesn't happen and prices drop, you may end up regretting an early purchase.
Also, worth noting is the fact that hybrids haven't been talked about as yet. While lower tax rates for electrical cars are in place, hybrid cars like Maruti Ciaz SHVS, Toyota Prius and Camry hybrid that presently love 12.Five per cent excise duty instead of twenty four per cent or twenty seven per cent may end up getting more expensive. So, it's the best time to get home these fuel-efficient hybrid cars because they may not remain as lucrative a buy afterwards.
Influence of GST On Car Prices In India
Influence of GST On Car Prices In India
India is eventually on the brink of having a simplified taxation system. But before the Goods & Service Tax (GST) comes into effect on July 1, two thousand seventeen (proposed), and substitutes numerous state and central taxes with a single levy, let's attempt to figure out how it will influence car prices in India.
As of May Nineteen, 2017, it's certain that cars will fall under the 'luxury' bracket and will attract a twenty eight per cent vapid GST. Over and above, an extra cess of 1, three or fifteen per cent is proposed depending on the classification of cars.
Since the implementation of GST is round the corner, the chances are high that the proposed extra cess will be a reality. If the current classification of cars is carried over (high probability), there will be four broad categories of cars:
1. Petite cars – Cars under four-metre length powered by a petrol engine not greater than 1.2-litre or a diesel engine not greater than 1.5-litre by displacement
Two. Mid-size cars – Cars over four-metre length powered by either a petrol or a diesel engine not greater than 1.5-litre displacement
Trio. Luxury cars – Cars over four-metre length powered by either a petrol or a diesel engine that is greater than 1.5-litre displacement
Four. SUVs – Cars over four-metre length and 170mm ground clearance powered by either a petrol or a diesel engine that is greater than 1.5-litre displacement
Here's a comparison of the current tax levied on these cars and proposed GST in comparison:
Break-up of existing taxes mentioned in Table – A is as under in Table – B:
Readers note – Ex-showroom price of a car is inclusive of all these taxes. VAT is applied over and above every other tax. As a result, the total tax will actually be higher than what we are assuming. Also, Green Cess and Octroi is charged in select states. The lower tax percentage is the minimum of all possibilities while the higher tax percentage is the maximum. Registration charges and insurance are not included in the ex-showroom price. VAT is charged at different rates in different states.
Before we take an example of a car; going by Table A, it is clear that in the case of puny cars (both petrol and diesel) GST will end up enlargening prices. However, that may not hold true for all those states that charge Octroi, for example, Maharashtra.
1. Petite car petrol category – Renault Kwid RXL 0.8
Ex-showroom, Fresh Delhi price – Rs Three,32,312
Since Octroi is not levied in Delhi, the ex-showroom price of Kwid RXL 0.8 includes excise, VAT and infra cess, which harshly adds up to twenty six per cent.
So, the ex-factory price of the Kwid = Rs Two,63,739
Now instead of twenty six per cent that is charged presently, the Kwid will attract twenty nine per cent GST.
Ex-showroom price of the Kwid RXL 0.8 post proposed GST rates = Rs Three,40,223
Increase in price = Rs 7,911
Two. Petite car diesel category – Maruti Suzuki Dzire Vdi AGS
Ex-showroom Fresh Delhi price – Rs 7,76,000
Since Octroi is not levied in Delhi, the ex-showroom price of Maruti Suzuki Dzire Vdi AMT includes excise, VAT and infra cess, which toughly adds up to 27.50 per cent.
So, the ex-factory price of the Dzire = Rs 6,08,627
Now instead of 27.Five per cent that is charged presently, the Dzire will attract thirty one per cent GST.
Ex-showroom price of the Maruti Suzuki Dzire Vdi AGS post proposed GST rates = Rs 7,97,301
Increase in price = Rs 21,301
Three. Mid-size cars category – Honda City VMT Petrol
Ex-showroom Fresh Delhi price – Rs Ten,12,797
Since Octroi is not levied in Delhi, the ex-showroom price of Honda City VMT Petrol includes excise, VAT and infra cess, which harshly adds up to 41.50 per cent.
So, the ex-factory price of the City = Rs 7,15,757
Now instead of 41.Five percent that is charged presently, the City will attract forty three per cent GST.
Ex-showroom price of the Honda City VMT Petrol post proposed GST rates = Rs Ten,23,532
Increase in price = Rs Ten,735
Four. Luxury cars category – BMW 320d Luxury Line
Ex-showroom Fresh Delhi price – Rs 42,70,000
Since Octroi is not levied in Delhi, the ex-showroom price of BMW 320d Luxury Line includes excise, VAT and infra cess, which harshly adds up to 44.50 per cent.
So, the ex-factory price of the 320d = Rs 29,55,017
Now instead of 44.Five per cent that is charged presently, the 320d will attract forty three per cent GST.
Ex-showroom price of the BMW 320d Luxury Line post proposed GST rates = Rs 42,25,674
Decrease in price = Rs 44,326
Five. SUVs category – Toyota Fortuner 4×4 AT diesel
Ex-showroom Fresh Delhi price – Rs 31,86,000
Since Octroi is not levied in Delhi, the ex-showroom price of Toyota Fortuner 4×4 Automatic diesel includes excise, VAT and infra cess, which harshly adds up to 48.50 per cent.
So, the ex-factory price of the Fortuner = Rs 21,45,454
Now instead of 48.Five per cent that is charged presently, the Fortuner will attract forty three per cent GST.
Ex-showroom price of the Toyota Fortuner 4×4 AT diesel post proposed GST rates = Rs 30,68,000
Decrease in price = Rs 1,Legitimate,000
The five examples above clarify that the most affected segment post GST in India could be the 'puny car diesel' category. The mid-size sedan and petite car petrol categories will also be negatively affected. On the flipside, luxury cars and high-end SUVs may end up being priced lower than what they presently are.
So, if you were planning a diesel hatchback or a sub-4m sedan, it's very likely the right time to go ahead and make a purchase before GST rolls out. We've also heard that some dealers want to liquidate their existing stock quicker than usual to keep their balance sheets clean and not risk their input tax credit. If that's true and you're fortunate, you may even get a good bargain.
For those who had set their eyes on a luxury car or a big SUV, just string up on for some more time to get more clarity on GST. Going by the anti-diesel sentiment, the government may find a reason to at least match the current prices of the SUVs and luxury cars. However, if that doesn't happen and prices drop, you may end up regretting an early purchase.
Also, worth noting is the fact that hybrids haven't been talked about as yet. While lower tax rates for electrified cars are in place, hybrid cars like Maruti Ciaz SHVS, Toyota Prius and Camry hybrid that presently love 12.Five per cent excise duty instead of twenty four per cent or twenty seven per cent may end up getting more expensive. So, it's the best time to get home these fuel-efficient hybrid cars because they may not remain as lucrative a buy afterwards.
Influence of GST On Car Prices In India
Influence of GST On Car Prices In India
India is eventually on the edge of having a simplified taxation system. But before the Goods & Service Tax (GST) comes into effect on July 1, two thousand seventeen (proposed), and substitutes numerous state and central taxes with a single levy, let's attempt to figure out how it will influence car prices in India.
As of May Nineteen, 2017, it's certain that cars will fall under the 'luxury' bracket and will attract a twenty eight per cent plane GST. Over and above, an extra cess of 1, three or fifteen per cent is proposed depending on the classification of cars.
Since the implementation of GST is round the corner, the chances are high that the proposed extra cess will be a reality. If the current classification of cars is carried over (high probability), there will be four broad categories of cars:
1. Puny cars – Cars under four-metre length powered by a petrol engine not greater than 1.2-litre or a diesel engine not greater than 1.5-litre by displacement
Two. Mid-size cars – Cars over four-metre length powered by either a petrol or a diesel engine not greater than 1.5-litre displacement
Three. Luxury cars – Cars over four-metre length powered by either a petrol or a diesel engine that is greater than 1.5-litre displacement
Four. SUVs – Cars over four-metre length and 170mm ground clearance powered by either a petrol or a diesel engine that is greater than 1.5-litre displacement
Here's a comparison of the current tax levied on these cars and proposed GST in comparison:
Break-up of existing taxes mentioned in Table – A is as under in Table – B:
Readers note – Ex-showroom price of a car is inclusive of all these taxes. VAT is applied over and above every other tax. As a result, the total tax will actually be higher than what we are assuming. Also, Green Cess and Octroi is charged in select states. The lower tax percentage is the minimum of all possibilities while the higher tax percentage is the maximum. Registration charges and insurance are not included in the ex-showroom price. VAT is charged at different rates in different states.
Before we take an example of a car; going by Table A, it is clear that in the case of puny cars (both petrol and diesel) GST will end up enlargening prices. However, that may not hold true for all those states that charge Octroi, for example, Maharashtra.
1. Petite car petrol category – Renault Kwid RXL 0.8
Ex-showroom, Fresh Delhi price – Rs Three,32,312
Since Octroi is not levied in Delhi, the ex-showroom price of Kwid RXL 0.8 includes excise, VAT and infra cess, which toughly adds up to twenty six per cent.
So, the ex-factory price of the Kwid = Rs Two,63,739
Now instead of twenty six per cent that is charged presently, the Kwid will attract twenty nine per cent GST.
Ex-showroom price of the Kwid RXL 0.8 post proposed GST rates = Rs Three,40,223
Increase in price = Rs 7,911
Two. Puny car diesel category – Maruti Suzuki Dzire Vdi AGS
Ex-showroom Fresh Delhi price – Rs 7,76,000
Since Octroi is not levied in Delhi, the ex-showroom price of Maruti Suzuki Dzire Vdi AMT includes excise, VAT and infra cess, which harshly adds up to 27.50 per cent.
So, the ex-factory price of the Dzire = Rs 6,08,627
Now instead of 27.Five per cent that is charged presently, the Dzire will attract thirty one per cent GST.
Ex-showroom price of the Maruti Suzuki Dzire Vdi AGS post proposed GST rates = Rs 7,97,301
Increase in price = Rs 21,301
Trio. Mid-size cars category – Honda City VMT Petrol
Ex-showroom Fresh Delhi price – Rs Ten,12,797
Since Octroi is not levied in Delhi, the ex-showroom price of Honda City VMT Petrol includes excise, VAT and infra cess, which toughly adds up to 41.50 per cent.
So, the ex-factory price of the City = Rs 7,15,757
Now instead of 41.Five percent that is charged presently, the City will attract forty three per cent GST.
Ex-showroom price of the Honda City VMT Petrol post proposed GST rates = Rs Ten,23,532
Increase in price = Rs Ten,735
Four. Luxury cars category – BMW 320d Luxury Line
Ex-showroom Fresh Delhi price – Rs 42,70,000
Since Octroi is not levied in Delhi, the ex-showroom price of BMW 320d Luxury Line includes excise, VAT and infra cess, which toughly adds up to 44.50 per cent.
So, the ex-factory price of the 320d = Rs 29,55,017
Now instead of 44.Five per cent that is charged presently, the 320d will attract forty three per cent GST.
Ex-showroom price of the BMW 320d Luxury Line post proposed GST rates = Rs 42,25,674
Decrease in price = Rs 44,326
Five. SUVs category – Toyota Fortuner 4×4 AT diesel
Ex-showroom Fresh Delhi price – Rs 31,86,000
Since Octroi is not levied in Delhi, the ex-showroom price of Toyota Fortuner 4×4 Automatic diesel includes excise, VAT and infra cess, which toughly adds up to 48.50 per cent.
So, the ex-factory price of the Fortuner = Rs 21,45,454
Now instead of 48.Five per cent that is charged presently, the Fortuner will attract forty three per cent GST.
Ex-showroom price of the Toyota Fortuner 4×4 AT diesel post proposed GST rates = Rs 30,68,000
Decrease in price = Rs 1,Legitimate,000
The five examples above clarify that the most affected segment post GST in India could be the 'puny car diesel' category. The mid-size sedan and puny car petrol categories will also be negatively affected. On the flipside, luxury cars and high-end SUVs may end up being priced lower than what they presently are.
So, if you were planning a diesel hatchback or a sub-4m sedan, it's most likely the right time to go ahead and make a purchase before GST rolls out. We've also heard that some dealers want to liquidate their existing stock quicker than usual to keep their balance sheets clean and not risk their input tax credit. If that's true and you're fortunate, you may even get a good bargain.
For those who had set their eyes on a luxury car or a big SUV, just string up on for some more time to get more clarity on GST. Going by the anti-diesel sentiment, the government may find a reason to at least match the current prices of the SUVs and luxury cars. However, if that doesn't happen and prices drop, you may end up regretting an early purchase.
Also, worth noting is the fact that hybrids haven't been talked about as yet. While lower tax rates for electrical cars are in place, hybrid cars like Maruti Ciaz SHVS, Toyota Prius and Camry hybrid that presently love 12.Five per cent excise duty instead of twenty four per cent or twenty seven per cent may end up getting more expensive. So, it's the best time to get home these fuel-efficient hybrid cars because they may not remain as lucrative a buy afterwards.
