Following the government’s reduction of taxes on cars, companies have begun to lower prices. Industry experts believe that prices of various cars, from Maruti Suzuki’s Alto to the luxury Mercedes-Benz S-Class, are likely to decrease by ₹45,000 to ₹10 lakhs. The new rates will come into effect from September 22nd, potentially leading to a price reduction of ₹45,000 to ₹1 lakh for small cars.
The Maruti Suzuki Alto, the most affordable entry-level car in the industry, currently has a showroom price of ₹4.23 lakhs. Similarly, luxury car manufacturers like Mercedes-Benz may reduce prices across their range, from the A-Class to the top-end S-Class, by ₹2 lakhs to ₹10 lakhs.
Regarding the tax cuts, the GST Council recently implemented significant changes, eliminating the 28% and 12% tax slabs. It approved limiting the slabs to 5% and 18%. Small cars have been placed in the 18% slab, which previously attracted 28% GST and a 1% cess. Consequently, small cars will experience a total tax reduction of 11%. The new prices will be effective from September 22nd, coinciding with the first day of Navratri. SUVs and luxury cars will be subject to 40% GST. Previously, these cars were taxed at 40% to 40% including cess.
Audi India announced in a statement that car prices are expected to decrease by 4% to 6% after the implementation of GST rates on September 22nd. Final prices will be announced soon. Similarly, the prices of BMW Group India’s X1 to X7 models are expected to drop by ₹2 lakhs to ₹9 lakhs. Several companies, including Tata Motors, Mahindra & Mahindra, Toyota Kirloskar Motor, and Renault India, have already announced price cuts.
