Planning to buy a car or bike this Diwali? Here's how much GST you have to pay

The Goods and Services Tax (GST) Council, on Wednesday, has revised tax rates on certain categories of vehicles. With this revision, most of the vehicles across different segments will now be cheaper than before. The new GST rates will be enforced from September 22. The move comes right before the festive season and will be enforced during the Navratri, which is one of the most prosperous times of the year for any automaker to register bolstered sales numbers.

The GST Council has reduced the GST slabs. The GST 2.0 regime has two slabs - five per cent and 18 per cent. Besides that, there is a special slab of 40 per cent, which is for luxury goods.

If you are planning to buy a car, motorcycle, or scooter this festive season, here is a quick guide for you: which models will attract how much GST?

Smaller cars become cheaper

With the GST revision, the small cars powered by petrol, CNG or LPG, having an engine up to 1200 cc and a size of up to 4000 mm, will see 18 per cent tax, down from the 29 per cent tax slapped currently, which includes 28 per cent GST and one per cent cess. Popular models such as Maruti Suzuki Alto K10, Maruti Suzuki Swift, Hyundai i20, Renault Kwid, Tata Tiago, etc., will be cheaper with this move.

Diesel cars, with up to 1500 cc engines and sized up to 4,000 mm, have become cheaper than before. These models will now be taxed at 18 per cent, down from 31 per cent, which includes 28 per cent GST and three per cent cess. Popular cars like the Tata Altroz and Hyundai Venue, among others, will be cheaper with this move.

Vehicle category	Old regime (GST + Cess)	Tax difference	New regime (GST 2.0)	Popular models to benefitted
Petrol, CNG, LPG cars with up to 1200 cc engine, up to 4,000 mm size	29%	-11%	18%	Alto K10, Swift, Grand i10 Nios, i20, Tiago, etc
Diesel cars with up to 1500 cc engine, up to 4,000 mm size	31%	-13%	18%	Altroz, Venue, etc
Petrol cars with engine between 1200 cc and 1500 cc	45%	-5%	40%	Brezza, XL6, Creta, City, etc.
Diesel cars with above 1500 cc engine	48%	-8%	40%	Harrier, Safari, Scorpio-N, XUV700, etc
Electric vehicles	5%	Nil	5%	Nexon EV, Windsor EV, Punch EV, etc
Bikes and scooters with up to 350 cc engine	28%	-10%	18%	Splendor series, Activa range etc
Bikes and scooters with above 350 cc engine	31%	+9%	40%	X440, Guerrilla 450, Super Meteor 650, Shotgun 650, etc

Bigger cars mean bigger tax

The bigger petrol and diesel cars will be taxed at a higher tax rate compared to their smaller siblings. However, even with the higher tax rate, the GST slapped on them will be lower than the current regime.

The petrol cars with an engine capacity between 1200 cc and 1500 cc will see 40 per cent GST, down from the current 45 per cent, which includes 28 per cent GST and 17 per cent cess. Models such as Maruti Suzuki Brezza, Maruti Suzuki XL6, Hyundai Creta, and Honda City will be positioned in this slab.

The diesel cars with engine capacity above 1500 cc will be taxed at 40 per cent, down from 48 per cent, which includes 28 per cent GST and 20 per cent cess. Models such as the Tata Harrier, Tata Safari, Mahindra Scorpio-N and Mahindra XUV700 are positioned in this slab.

Empty hand for electric vehicles

Electric vehicles came out empty-handed in this GST revision. All the electric vehicles in India will continue to be taxed at five per cent under the GST 2.0 regime, which is the same as the current tax rate.

Mixed bag for two-wheelers

While in the passenger vehicle segment, the tax slabs have been lowered, even if a car is slapped with 40 per cent tax, the two-wheeler category has a mixed bag. The motorcycles and scooters with an engine capacity of up to 350 cc will now be taxed at 18 per cent, down from 28 per cent. This means all the 100 cc, 125 cc, 160 cc, 200 cc, 250 cc and 350 cc engine-powered two-wheelers in India will be cheaper than before. Almost all the two-wheeler manufacturers, including Hero MotoCorp, Honda, TVS, etc., will see a lower tax.

The only true tax hike came for the two-wheelers with an engine capacity of above 350 cc. These two-wheelers will now be taxed at 40 per cent, up from 31 per cent, which includes 28 per cent GST and three per cent cess. Bigger bikes from Royal Enfield, Harley-Davidson will be costlier with this move.

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