The GST Council, chaired by Finance Minister Nirmala Sitharaman, has announced a major change in vehicle taxation. From September 22, GST on most cars and two-wheelers has been reduced from 28% to 18%. However, luxury and premium vehicles will attract higher taxes, with some moving into the 40% tax slab.
How much will small car prices drop?
Thanks to this GST cut, small and mid-sized cars are set to become more affordable. Popular models such as Maruti Suzuki Alto, Hyundai Grand i10, and Tata Tiago (currently priced between 5-7 lakh) will see prices fall by 8-10%. This translates into savings of up to Rs 70,000 for buyers.
How much will bikes get cheaper?
Two-wheelers with engines up to 350cc will also benefit. Bestsellers like Honda Shine, Yamaha FZ, TVS Apache, and Bajaj Pulsar could see prices fall by nearly 10%. For example, a bike priced at 1 lakh may now cost Rs 10,000 less, giving a big relief to budget-conscious riders.
Which vehicles will get costlier?
While smaller vehicles are becoming cheaper, luxury cars, SUVs, and bikes above 350cc are moving into the 40% GST bracket. This means their prices will rise by 10-12% or more. A Royal Enfield 650cc, currently priced at Rs 3.6 lakh, could now cross the Rs 4 lakh mark.
Whereas, the Classic 350, still within the lower tax category, could drop from Rs 2.25 lakh to Rs 2.05 lakh.
Even mid-size sedans around 15 lakh may see a modest 3-5% reduction, saving buyers around Rs 45,000-Rs75,000.
This decision aims to make personal transport more affordable for the middle class, especially in the small car and commuter bike segment. However, those looking to buy luxury cars or high-capacity motorcycles may have to shell out more.
