In response to the updated Goods and Services Tax (GST) regulations, Tata Motors is set to decrease prices across its passenger vehicle lineup by up to Rs 1.45 lakh. These price reductions will become effective starting September 22. The company confirmed that the full benefits of the new GST 2.0 framework would be extended to its customers.
The modifications and simplifications in tax rates introduced by GST 2.0 are expected to provide significant relief to the automobile sector, which could see a boost in sales amidst current market conditions. The GST Council has streamlined the tax structure, introducing two primary tax rates: 5% and 18%, and removing the cess levied on vehicles.
Specifically, vehicles powered by petrol, LPG, and CNG with engines under 1200cc and a length below 4,000 mm, along with diesel vehicles up to 1,500cc and 4,000 mm in length, will now attract an 18% GST, a reduction from the previous 28% rate.
Conversely, all petrol cars with engines over 1200cc and diesel vehicles exceeding 1500cc will be shifted to a 40% GST rate.
A 40% GST will also be imposed on automobiles exceeding 1200cc and longer than 4,000 mm, motorcycles with engines over 350cc, racing cars, and personal yachts and aircraft.
Electric vehicles (EVs) will continue to be taxed at 5%, while three-wheelers will be subject to an 18% GST.