Goods and Services Tax (GST) is now only a few days from being brought into effect, and the automotive industry has been on a spree for offering GST related discounts. While prices on small cars are unlikely to go down, there is a reason to rejoice for anyone who is hoping to purchase a luxury car or SUV or a higher-displacement motorcycle.
Car brands have lined up GST discounts one after the other and so has the two-wheeler industry too thinking on the same lines. However, only three motorcycle brands have so far officially announced GST benefits - Bajaj, Royal Enfield and UM Motorcycles.
GST discounts on luxury cars and SUVs
First in line to announce pre-GST discounts was Mercedes-Benz, who lowered prices on their locally assembled models. The extensive list of models includes the CLA, GLA, GLC, GLE and GLS, C-Class, E-Class, S -Class and Maybach S 500. The discounts will range from a sizeable 1.4 lakh on the CLA and go all the way up to Rs 7 lakh on the top-of-the-line Maybach S500. Aside from this, the company has also said that there will be a discount announcement for the CBU units in the near future once a strategy is in place.
Tata Motors-owned Jaguar Land Rover (JLR) soon followed suit, slashing prices by up to 10.9 lakh. What this means in numbers is that the Jaguar XE will be cheaper in the range of Rs 2 lakh to 5.7 lakh, depending on the variant. The discounts could go even higher in the case of the Jaguar XJ between Rs 4-10.9 lakh. Land Rover’s Discovery Sport and the Range Rover Evoque could see price cuts to the tune of 7.5 lakhs and a minimum discount of Rs 3.3 lakh.
Also on the list to capitalise on the GST discount module, Isuzu announced discounts on both the D-Max and the V-cross. The Isuzu MU-X is now available with a benefit of up to Rs 1.5 lakh on ex-showroom price. It was earlier priced at Rs 23.9 lakh and Rs 25.9 lakh for the 4X2 and 4X2 variants.
The five-seater SUV now carries a price tag of Rs 22.4 lakh for the 4X2 and Rs 24.4 lakh for the 4X4 AT versions. Both prices are ex-showroom, Delhi. The car manufacturer is also offering discount benefits on its V-Cross model. It was earlier priced at Rs 13.3 lakh and after application of discount, it is priced at Rs 12.7 lakh, ex-showroom, Delhi.
Ford too announced a discount on three of its models. Ford scrubbed 30,000 off the compact SUV EcoSport's price. The Aspire and Figo also get Rs 30,000 off their ex-showroom tags.
BMW India too announced pre-GST benefits on its Facebook page, although it isn't clear what offers apply to each model. The company is offering a 7.90 % interest rate along with complimentary service, maintenance and insurance. The post states preponed GST benefits in addition to the mentioned ones. Nonetheless, the value of these benefits would also run beyond the scope of a couple of lakh Rupees, making the model range more lucrative.
GST discounts on motorcycles
Bajaj has announced discounts upto Rs 4,500 on its product line up. A dealer in Noida has confirmed to us that the GST discount on Bajaj RS200 is Rs 2,700. Those wanting to buy a Pulsar 220 can expect a discount of Rs 2,000 and the GST benefit on the Avenger 220 is Rs 1,800.
Royal Enfield became the second motorcycle manufacturer to announce GST discounts on its product range after Bajaj. The exact amount of the discounts and on all models is not known, however, check with your local dealer as the amount will differ as per the model and the state of purchase.
GST effect on hybrid cars
Minister for Road Transport and Highways and Shipping Nitin Gadkari has been pitching for a tax reduction for hybrid, semi-hybrid and electric cars. This will only benefit the government's ambitious plan of going all electric by 2030.
The Society for Indian Automotive Manufacturers also collaboratively advised the government to adjust the GST slab for hybrids and bring them down to a more rational 18%. The existing bracket saw hybrids taxed at 12.5% (within the small car tax bracket) but after a dip in the cess pool of taxes, including a 1 percent National Calamity Contingent Duty, 2 per cent Central Sales Tax and 12.5 per cent VAT bringing the total duties to a tolerable, but still questionable, 30.3%. Read full story here
With GST, these prices are likely to rise considering that they will be exposed to a 43% tax rate, which means that they will be a whole 13% more expensive. Translate that, your Toyota Camry Hybrid will now be about Rs 3 lakh more expensive. While a Honda accord could cost up to Rs 6 lakh more.