On the very first day of new GST regime the benefit of new taxation system is beginning to show. The Economic Times reported that after the GST rollout carmaker Maruti Suzuki has slashed the prices on vehicles by upto 3 per cent.
However, the rate of reduction in prices varies across locations depending on the VAT rates applicable prior to GST. With this Maruti Suzuki becomes the first company to pass on the GST benefit to the customers.
According to the report, the company said: "Due to withdrawal of tax concessions on mild hybrid vehicles, the price of Smart Hybrid Ciaz Diesel and Smart Hybrid Ertiga Diesel has increased."
Under the GST rates, cars attract the top rate of 28 per cent with a cess in the range of 1-15 per cent on top of it. While small petrol cars with engine less than 1,200 cc will attract 1 per cent cess, that with a diesel engine of less than 1,500 cc will attract 3 per cent cess.
Large cars with engine greater than 1,500 cc and SUVs with length more than 4 metres and engine greater than 1,500 cc will attract a cess of 15 per cent.
Earlier in Jun, car manufacturing majors like Mercedes, BMW and Audi offered discounts of up to Rs 10 lakh till June 30. BMW offered benefits up to 12 per cent on ex-showroom prices that include GST benefits, depending on choice of the model.
Mercedes Benz announced reduction of prices of its vehicles produced in India by up to Rs 8 lakh. Tata-Motors owned Jaguar Land Rover (JLR) cut prices of select models by up to Rs 10.9 lakh to pass on benefits of new tax rates under GST.
Under the previous taxation system, SUVs and other luxury cars were taxed above 50 per cent, however, after the GST the taxes on these cars have come down to 43 per cent including the cess.