GST Effect: Premium cars become substantially cheaper

Was your favourite luxury vehicle a bit too expensive? GST might have come to your rescue.

1 July, 2017 has passed, and we have now officially entered the Goods & Services Tax (GST) era. The entire country was shaken up during the first half of 2017 preparing for the new GST regulations. Now that GST is very much in action, it’s time to take a look at how your car buying decision may be affected.

The news is gloomy if you have been planning to tame your craving for a big motorcycle – all motorcycles above 350cc will be getting dearer now. On the contrary, it’s a fiesta for those aspiring to buy a premium car.

The GST taxation rate for all vehicles over 4 metre in length, and having engine displacement larger than 1.2-litre and 1.5-litre for petrol and diesel respectively – now stands at a flat 43 per cent. This is considerably lesser than the up to 51.6 per cent tax which was levied during the pre-GST era. SUVs are biggest gainers here – earlier the SUV category was taxed at up to 55 per cent.

Vehicle Type	Pre-GST tax	Post-GST tax
Small (<4m length)	26% - 35.5%	29% - 31%
Mid-size (<1.5-litre engine)	40.5% - 48.5%	43%
Premium (>4m length, >1.5-litre engine)	44.5% - 51.6%	43%
SUV (>170mm ground clearence)	47.5% - 55%	43%

 

GST has eliminated the separate category for SUV taxation, and now SUVs, saloons and hatchbacks - all come under the same umbrella. The criteria for taxation post-GST are the vehicle’s length and engine capacity.

A majority of vehicles in the premium spectrum are over 4-metre in length and are powered by big-capacity motors. This means that the price revisions in the premium segment are so juicy that it may motivate you to take your cheque books out very soon. 

SUVs are all the rage right now, and courtesy GST, Tata owned Land Rover products have become super lucrative. As ridiculous as it may sound, the flagship Range Rover has had Rs. 62 lakh slashed from its starting price - that’s equivalent to a Jaguar XF! Other Land Land Rover SUVs too are enjoying good price reductions - the entry-level Discovery Sport is now cheaper by almost 15%.

If saloons are your thing then fret not - Jaguar saloons are also effectively cheaper now, and so is the recently launched Mercedes E-Class LWB. Here are some luxury car price revision highlights.

Model	Pre-GST Price Range (INR)	Post-GST Price Range (INR)	Percentage decrease (approx.)
Toyota Fortuner	26.66 - 31.86 Lakh	24.41 - 29.18 Lakh	8.40%
Jaguar XE	37.25 - 46.34 Lakh	34.64 - 43.21 Lakh	6.75%
Jaguar XF	47.50 - 60.10 Lakh	44.89 - 56.35 Lakh	6.65%
Jaguar F-Pace	68.4 - 119.0 Lakh	67.37 - 110.54 Lakh	7.10%
Mercedes E-Class	57.70 - 69 Lakh	55.70 - 67.00 Lakh	2.89%
Land Rover Discovery Sport	43.80 - 62.18 Lakh	40.04 - 52.88 Lakh	14.95%
Land Rover Range Rover Evoque	45.85 - 67.90 Lakh	42.37 - 56.97 Lakh	16.20%
Land Rover Range Rover Sport	116.0 - 204.0 Lakh	89.44 - 159.4 Lakh	21.80%
Land Rover Range Rover	220.0 - 385.0 Lakh	158.65 - 343.88 Lakh	27.80%

 

Update on 05-07-2017

Model	Pre-GST Price Range (INR)	Post-GST Price Range (INR)	Percentage decrease (approx.)
Audi A3	30.5 - 35.65 Lakh	30.77 - 35.29 Lakh	1%
Audi Q3	30.50 - 40.98 Lakh	32.48 - 40.60 Lakh	1%
Audi A4	38.10 - 43.30 Lakh	38.4 - 42.66 Lakh	1.40%
Audi A6	52.75 - 53.75 Lakh	51.93 - 52.91 Lakh	1.50%
Audi Q7	72.10 - 80.95 Lakh	70.12 - 77.84 Lakh	3.80%