Leading Indian carmakers have announced steep price cuts across their portfolios after the GST Council reduced tax rates on automobiles last week.
Under the next-generation GST reforms, the government has lowered the goods and services tax rate on small cars from 28% to 18%, while luxury vehicles now attract a flat 40% rate.
According to Kotak Institutional Equities, on-road prices are expected to fall 5-8% on average, with passenger vehicles seeing reductions of 2-9% in overall cost. Automakers have moved quickly to pass on the benefit, announcing cuts ranging from thousands to a few lakhs across several models.
Mahindra and Mahindra announced price cuts for its passenger vehicles across segments on Sept. 6. The company reduced the price for Bolero by Rs 1.27 lakh, Scorpio by Rs 1.45 lakh, Thar Roxx by Rs 1.33 lakh and XUV700 by Rs 1.43 lakh.
Potential car buyers can now save up to Rs 1.56 lakh on M&M vehicles. The company said more than 60% of its sales volumes, including commercial vehicles, fall under the reduced 18% GST slab.
Tata Motors has announced price cuts on both passenger and commercial vehicles. The Nexon cost dropped by Rs 1.55 lakh and the Safari by Rs 1.45 lakh. In commercial vehicles, heavy CVs became cheaper by Rs 2.8-4.65 lakh, buses and vans by Rs 1.2-4.35 lakh and pickups by Rs 30,000-1.10 lakh. Tata Motors became the first major CV manufacturer to pass on full GST benefits. The new prices will come into effect from Sept. 22.
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