The Indian government has announced Goods and Services Tax (GST) reforms after a long wait. These changes aim to leave more money in the hands of consumers and boost consumption in the market. The automobile sector has welcomed this decision and hopes that this step will provide a new impetus to demand, especially during the festive season.
Under the new slabs, electric vehicles will continue to attract a GST of 5 percent. Small car segments, meaning cars up to 4 meters in length and with engines of 1200 cc (petrol-diesel), will now be taxed at only 18 percent. This is a direct reduction of 10 percent from the previous 28 percent. This relief will benefit small car buyers and also provide companies with an opportunity to increase sales.
The government has not only taken care of small cars but also large and luxury cars. The government has set the tax on premium SUVs, high-end EVs, and luxury cars at 40 percent. Previously, cess was also levied on cars along with tax, but now the government has removed the cess. As a result, consumers can now fulfill their dream of buying large and stylish cars.
