Showrooms selling cars and motorcycles must now display posters showing the revised prices under GST 2.0. These posters should clearly indicate both the previous and current prices. Additionally, the posters are required to feature a photograph of Prime Minister Narendra Modi. The Ministry of Heavy Industries (MHI) has instructed car and two-wheeler manufacturers to ensure these posters are displayed at all their dealerships. These posters must compare the old and new prices following the recent alterations to the Goods and Services Tax (GST).
The directive was communicated to the companies via the Society of Indian Automobile Manufacturers (SIAM). The Ministry has also mandated the inclusion of Prime Minister Narendra Modi’s image on the posters. Consequently, automotive companies are now preparing these posters and submitting them to the Ministry for review and approval.
The new GST rates are scheduled to come into effect from September 22.
The introduction of GST 2.0 in India is directly influencing the pricing of cars. The new tax system has established just two tax slabs for cars: 18% and 40%. Smaller cars, including those with petrol or CNG engines up to 1200cc, diesel engines up to 1500cc, and measuring less than 4 meters in length, will now be subject to an 18% GST. Previously, these cars were taxed at 28% GST along with a cess of 13%, resulting in a total tax burden of approximately 29-31%. This has now been reduced to 18%. Larger and mid-size cars and SUVs, those with engines above 1500cc and exceeding 4 meters in length, will now attract a 40% GST. Previously, they faced a 28% GST plus a cess of 15-22%, leading to a total tax of around 43-50%. This category also sees a decrease of 5-10% in tax.
Two-wheelers are also set to become more affordable.
The implementation of GST 2.0 in India is having a significant impact on two-wheelers. The government has introduced new tax rates, leading to lower prices for smaller scooters and bikes, making them more accessible to consumers. However, premium and high-end bikes will now be more expensive. Under the new regulations, bikes up to 350cc and all scooters will be subject to a GST of 18%. Earlier, these vehicles were taxed at approximately 31% (28% GST + 3% cess). Bikes with engines above 350cc will now be taxed at 40%, whereas previously they faced approximately 31% tax.