New GST Tax Rates on Luxury Cars

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New GST Tax Rates on Luxury Cars. Under the GST regime, cars attract the highest tax slab of 28 percent and on top of that, a cess is levied. An ordinance was promulgated last week to hike the cess from 15 percent to up to 25 percent.

The Council on Saturday decided on the quantum of hike in cess in various segments.

The highest pre-GST tax incidence on motor vehicles worked out to about 52-54.72 percent, to which 2.5 percent was added on account of central sales Tax, octroi and the like. Against this, post-GST, the total tax incidence came to 43 percent.

With the revision in cess quantum, now the anomalies have been removed to a greater extent.

Small cars (Petrol): 28.00% base + 1.00% cess = 29.00%

Small cars (Diesel): 28.00% base + 3.00% cess = 31.00%

Mid-size cars: 28.00% base + 17.00% (+2%) cess = 45.00%

Luxury cars: 28.00% base + 20.00% (+5%) cess = 48.00%

SUVs: 28.00% base + 22.00% (+7%) cess = 50.00%

Hybrids: 28.00% base + 15.00% cess = 43.00%

Electric: 12%

Here’s how cars are classified in India:

1. Small cars– Cars under four metre in length, powered by a petrol engine not greater than 1.2-litre or a diesel engine not greater than 1.5-litre, by displacement

Example: Maruti Suzuki Alto 800

2. Mid-size cars– Cars over four metre in length, powered by either a petrol or a diesel engine not greater than 1.5-litre, in terms of displacement

Example: Maruti Suzuki Ciaz (petrol)

3. Luxury cars– Cars over four metre in length, powered by either a petrol or a diesel engine that is greater than 1.5-litre in terms of displacement

Example: BMW 5 Series

4. SUVs– Cars over four metre in length and 170mm ground clearance, powered by either a petrol or a diesel engine that is greater than 1.5-litre in terms of displacement

Example: Toyota Fortuner