Tata Motors revealed plans to lower prices across its passenger vehicle range, with reductions reaching up to Rs 1.45 lakh. This adjustment stems from the recent GST reforms. The price cuts are scheduled to take effect from September 22. The company confirmed that the full benefits of GST 2.0 will be passed on to consumers.
The introduction of simplified tax rates under GST 2.0 is expected to bring significant relief to the automotive sector, potentially stimulating a recovery amid sluggish sales. The GST Council streamlined the tax system with two primary slabs: 5% and 18%, concurrently eliminating the cess on vehicles.
Specifically, petrol, LPG, and CNG vehicles equipped 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 be subject to an 18% GST, replacing the previous 28% rate.
Conversely, all petrol cars exceeding 1200cc and diesel vehicles above 1500cc will be placed in the 40% GST bracket.
Furthermore, a 40% GST will be imposed on all automobiles above 1200cc and longer than 4,000 mm, motorcycles over 350cc, racing cars, and yachts and aircraft intended for personal use.
Electric vehicles (EVs) will continue to be taxed at 5%, while three-wheelers will attract an 18% GST.