The government has approved GST 2.0, bringing major relief to car buyers across India. With this decision, GST on small cars has been reduced from 28% to 18%. The new rates will be applicable from September 22. This move is expected to create excitement in the automobile market, as popular cars from Maruti Suzuki will now be available at much lower prices.
Maruti Alto Price Reduced by ₹40,000 to ₹50,000
Maruti Suzuki’s best-selling small hatchback, Alto, will become more affordable after the new GST rates. The price of Alto is likely to drop by ₹40,000 to ₹50,000. This makes the car an attractive option for budget-conscious buyers who are looking for a reliable and fuel-efficient hatchback at a lower cost.
Maruti WagonR to Get Cheaper by ₹60,000 to ₹67,000
The country’s most popular family car, Maruti WagonR, is set to see a massive price drop. According to the company, WagonR prices may reduce by ₹60,000 to ₹67,000 after the new tax cut. This price reduction is expected to boost sales further, as WagonR is already one of the top-selling models in India, known for its space and practicality.
Which Cars Will Benefit From GST 2.0
The GST cut will apply to petrol, petrol-hybrid, CNG, and LPG cars under 1200cc engine capacity and up to 4 meters in length. Diesel and diesel-hybrid cars with engines up to 1500cc and within 4 meters length will also get the benefit. This makes small hatchbacks and compact sedans the biggest gainers under the new GST structure.
Industry Reaction on Price Cuts
Maruti Suzuki Chairman RC Bhargava welcomed the GST reduction. He said that small cars have been struggling in the market for some time, and this decision will help revive growth. He expects the small car segment to grow by more than 10% this year. Overall, the passenger car market may see a rise of 6% to 8%, supported by lower interest rates, tax benefits, and now reduced GST.
Impact on Overall Car Prices
The GST Council’s move could bring a 9% reduction in car prices, as transportation and dealer margin costs remain unaffected. Even luxury cars will see some relief, with their GST capped at 40% compared to the earlier 43% to 50%. For small cars like Alto and WagonR, however, the benefits are much more significant, giving customers a chance to save big.
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