Recent changes in Goods and Services Tax (GST) regulations are significantly affecting the automotive market, leaving potential car buyers, particularly those interested in SUVs from brands like Suzuki, Hyundai, Tata, and Kia, in a state of uncertainty. The GST Council’s 56th meeting led to adjustments in tax rates. Small cars now face an 18% GST, down from 28%, while larger vehicles, including SUVs, are subject to a 40% tax. Electric vehicles (EVs) continue to have a 5% GST. Auto components, regardless of the vehicle type, are taxed at 18%. A small car is defined as one under four meters in length with petrol/CNG/LPG engines below 1,200 cc and diesel engines below 1,500 cc. Cars exceeding these specifications will be taxed at the 40% rate. The new rates could shift consumer preferences towards EVs and hybrids. The impact on vehicle prices will become clear after price revisions. Several auto companies are expected to adjust prices to pass benefits to consumers.
