The government has provided relief to the common people by reducing GST on cars. This relief will greatly benefit those purchasing cars. Most companies have already issued new prices according to GST 2.0. The new and reduced prices will be implemented from September 22nd. In this context, the question arises whether people who booked cars before September 22nd will get the benefit of the new GST reduction or if they will have to book their cars from September 22nd.
Buying a car is a significant decision, similar to buying or building a house. People start planning months in advance. Furthermore, some cars require waiting periods of several weeks, necessitating prior booking. Many individuals may have already booked cars for delivery during Navratri. These people are now contacting dealerships to inquire whether they will benefit from the new GST reduction.
Will those who booked earlier get the benefit of the new GST? The answer is yes. A sales executive from Maruti Suzuki stated that every customer taking delivery of a car on or after September 22nd will benefit from the new GST. This is because GST is applied when the final billing of the car is done, meaning the tax will be levied according to the new GST at the time of final payment on the delivery day. Customers will start benefiting from September 22nd, regardless of whether the booking was made earlier or not.
A question arises whether people who take delivery before September 22nd will get the benefit of the new GST or not. The answer is no. GST will be applied at the old rate if delivery is taken before September 22nd. If you take delivery earlier, you will have to pay more GST. The Federation of Automobile Dealers Associations (FADA) stated on Monday that sales declined due to delaying deliveries in August. Many people are delaying deliveries to take advantage of the GST reduction. The automotive body said that buyers postponed purchases until September, anticipating lower rates due to the ‘GST 2.0’ announcement.
Small Cars Now Cheaper
After the changes in GST, small cars running on petrol or CNG, with engines up to 1200cc and a length of up to 4000mm, will now have an 18% tax applied. Previously, they were taxed at 29%. Cars like Maruti Suzuki Alto K10, Maruti Suzuki Swift, Hyundai i20, Renault Kwid, Tata Tiago will benefit and become cheaper. Diesel cars with engines up to 1500cc and a length of up to 4000mm have also become cheaper. They will now be taxed at 18%, whereas previously, the tax was 31%. This includes cars like Tata Altroz and Hyundai Venue.
Large Cars, More Tax
Tax on large petrol and diesel cars will be higher than on smaller cars, but it will still be less than the old tax. Petrol cars with engines above 1200cc and a length of more than 4 meters will now be taxed at 40%. Previously, it was 45%. This included 28% GST and 17% cess. This category includes cars like Maruti Suzuki Brezza, Maruti Suzuki XL6, Hyundai Creta, and Honda City. Diesel cars with engines above 1500cc will now be taxed at 40%. Previously, a total of 48% tax was levied, including a 20% cess. This category includes cars like Tata Harrier, Tata Safari, Mahindra Scorpio-N, and Mahindra XUV700.
