Tata Motors has declared a reduction in prices for its passenger vehicles, with the maximum decrease reaching Rs 1.45 lakh. This strategic move aligns with the newly enacted GST reforms. The price adjustments are set to be effective from September 22. The company stated its commitment to transferring the full advantages of GST 2.0 to its customers.
The simplified tax structure of GST 2.0 is anticipated to offer substantial benefits to the automotive industry, which could help revive sales in a challenging market. The GST Council established a simplified system with two rates—5% and 18%—and removed the cess on vehicles.
Vehicles running on petrol, LPG, and CNG with engines not exceeding 1200cc and a length of less than 4,000 mm, plus diesel vehicles up to 1,500cc and 4,000 mm in length, will now be taxed at 18% instead of the previous 28%.
However, all petrol cars with engines larger than 1200cc and diesel vehicles above 1500cc will be subject to a 40% GST.
A 40% GST will also apply to all automobiles over 1200cc and longer than 4,000 mm, motorcycles exceeding 350cc, racing cars, and personal yachts and aircraft.
Electric vehicles will continue to be taxed at 5%, and three-wheelers will face an 18% tax.