GST impact on cars
GST impact on carsIBT Media

The increased Goods and Services (GST) cess on mid-sized and luxury cars as well as SUVs will come into effect on Monday, September 11.

The GST Council on September 9 decided to hike cess on mid-sized cars by 2 percent, large cars by 5 percent and the SUVs by 7 percent.

Here is a look at how your car buying will be affected with hike in cess.

Cars with smaller petrol engines

Renault Kwid Climber
Renault Kwid ClimberRenault

Cars under 4-metre length and powered by petrol engines less than 1.2-litre capacity will continue to attract 29 percent tax under GST, including 1 percent cess.

Cars with smaller diesel engines

Maruti Suzuki Baleno
Maruti Suzuki BalenoMaruti Suzuki

Cars under 4-metre length and powered by diesel engines less than 1.5-litre capacity are taxed at 31 percent (28 percent + 3 percent cess).

Mid-sized cars with less than 1.5 litre engine

Volkswagen Polo GTI, Volkswagen Polo GTI India, Volkswagen Polo GTI price
Volkswagen Polo GTIvolkswagen/Facebook

This new mid-sized car segment will see a 2 percent hike on the current GST cess, taking the total tax incidence to 45 percent. 

Larger cars or luxury cars

Maruti Suzuki Ciaz, Maruti Suzuki Ciaz new, 2017 Maruti Suzuki Ciaz
Maruti Suzuki Ciazmarutisuzuki

All cars in this category will bear a 5 percent hike in cess, taking the total cess to 20 percent from the current 15 percent. The cars in this segment will now be taxed at 48 percent.

SUVs longer than 4 metre and with larger engines

Jeep Compass
Jeep CompassJeep India

This is where the hike in cess is going to leave a bigger dent as a result of the cess being raised 7 percent. It and takes the total GST incidence to 50 percent from the current 43 percent.

GST effect on electric cars

Mahindra eVerito
Mahindra eVeritoMahindra Electric

Electric cars will continue to attract a lower tax rate of 12 percent.

GST effect on hybrid cars

Honda Accord Hybrid
Honda Accord hybridHonda Car India

The cess on hybrid cars has not been changed and will continue at 15 percent.

Segment Current Cess rate Proposed Cess rate Models
Cars with smaller petrol engine 1% No change Tata Nano, Maruti Suzuki Alto, Renault Kwid
Cars with smaller diesel engine 3% No change Maruti Suzuki Baleno, Swift, Hyundai i20, Honda Jazz
Cars with more than 1.2L petrol and 1.5L diesel engine capacity 15% No change Fiat Abarth Punto, Volkswagen Polo GTI
Cars with more than 4-metre length and bigger engines 15% (28% +17% Cess) OR (28% GST +20% Cess) Honda City, BMW 5 Series, Mercedes-Benz S-Class,
SUVs longer than 4-metre 15% 22% Maruti Suzuki Vitara Brezza, Jeep Compass, Mercedes-AMG G 63
Hybrid vehicles 15% No change Toyota Camry hybrid, Honda Accord hybrid, Lexus' hybrid range
Electric cars 12% No change Mahindra E2o, eVerito