Significant discussions are underway in the Indian automotive sector regarding potential changes to the Goods and Services Tax (GST) structure. The government is considering simplifying the GST framework and reducing tax rates, which could lead to a decrease in the tax burden on small and mid-size cars. This could result in lower prices for consumers. If you’re planning to buy a car like the Creta, Venue, Exter, or i20 this Diwali, here’s an estimate of how the prices might change. Currently, small cars are subject to a 28% GST and a 1% cess, totaling approximately 29% in taxes. If the government reduces this to 18%, consumers could see a 10% tax reduction, directly affecting car prices. For example, if a car’s ex-factory price is ₹5 lakh, the current tax structure could make its price reach ₹6.45 lakh. However, under the new system, the car might be available for around ₹5.90 lakh, resulting in a savings of approximately ₹55,000 for the customer. If GST is reduced from 28% to 18%, significant price drops are expected for these cars. The Hyundai Exter, with a starting price of ₹5,99,900, currently has ₹1,73,971 in taxes. With the GST reduction, buyers could save around ₹59,990. The Hyundai i20, currently priced at ₹7,50,900, could see a price reduction of about ₹75,000 after the GST cut. The Hyundai Venue, with a current price of ₹7,94,100, could offer savings of approximately ₹79,400. The Hyundai Creta, one of the best-selling SUVs in the country, has a starting price of ₹11,10,900. With the GST reduction, customers could save approximately ₹1,11,000. The biggest beneficiaries will be those middle-class customers looking to buy a new car within a budget. Hatchbacks and compact SUVs could see price reductions ranging from ₹60,000 to ₹80,000.
