For carmakers, GST has become a convenient way of pushing up sales in the recent past. It is hard to ignore the alluring offers posted by companies ranging from Mercedes to Ford as they seek to make the most of the ambiguity surrounding the landmark tax system set to be implemented from July 1.
Post GST, budget and mass-market cars may see an upward revision in prices ranging anywhere between 3% and 5%. A car priced at Rs 5 lakh would see its price go up from Rs 15,000 to Rs 25,000.
Popular cars like Alto from Maruti will see an increase in prices as the tax levied on them will be more than 29% from the current rate of 25-27.5%.
Expecting a slump, Maruti Suzuki dealers are currently extending discounts of Rs 25,000-35,000 on Alto and Swift.
Other carmakers are also not far behind.
Hyundai is offering price benefits in the range of Rs 25,000 (on Elite i20) to Rs 2,50,000 (on Santa Fe). Datsun is packaging deals with free insurance and reduced interest rates. Hyundai, in fact, is offering pre-GST benefits across its range of vehicles – Rs 45,000 on Eon, Rs 62,000-73,000 on Grand i10, Rs 80,000-90,000 on Verna and Rs 25,000 on its new XCent till June 26, 2017.
As per an ET report, most companies have agreed to provide financial support to dealers during the transition. The effort is to liquidate as much inventory as possible before July 1.
Honda Cars India's offer is the most innovative. It has assured compensation to buyers in event of a decline in vehicle prices due to implementation of GST.
So, depending on your preference and budget, car makers are trying their best to lure prospective customers with eye-popping discounts and offers.
But how will it stack up post GST?
Take the example of Renault Kwid, which is currently priced at Rs 3,32,312 (ex-showroom New Delhi). Its price will go up by around Rs 7,900 once GST is implemented as this car will attract tax of 29% from the current 26%.
Prices of mid-segment cars such as Honda City will also see an upward revision. A Honda City petrol version is presently priced at Rs 10,12,797 (ex-showroom New Delhi) and it includes excise, VAT and infra cess, which adds up to around 41.50%. Post GST, this car will attract around 43% tax. So, its price will shoot up by Rs 10, 735.
The most affected category will be the small diesel cars. Their prices will shoot up by more than Rs 21,000.
Maruti Suzuki Dzire is priced at Rs 7,76,000 ex-showroom New Delhi. Post GST, the same car will be priced at around Rs 7,97,300, an increase of more than Rs 21,000.
However, those planning to buy a luxury car or an SUV can look forward to some exciting offers as GST is set to make cars in these segment a lot cheaper.
As per calculations based on proposed GST rates, a car that costs Rs 50 lakh will see the price coming down anywhere between Rs 50,000 and Rs 2.5 lakh.
For example, a Toyota Fortuner is presently priced at Rs 31,85,480 (ex-showroom New Delhi). Post GST, it will be priced at around Rs 30,67,480. The price will decrease by Rs 1,18,000.
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