GST (Goods and Service Tax) forms a significant portion of a car’s on-road price and directly influences the overall cost to the buyer. Applied to the ex-showroom price, it varies based on the vehicle type, with additional cess for premium or high-performance models. Understanding how GST (previously sales tax on cars) is calculated is essential for making an informed automobile purchase.
How to find sales tax on Cars?
In India, GST on cars varies based on several factors such as the vehicle's type, size, fuel type and intended use. Here's a quick overview:
|
Vehicle Category
|
GST %
|
|
Electric vehicles
|
5
|
|
Passenger vehicles (Petrol) up to 4m in length and up to 1200cc engine
|
28
|
|
Passenger vehicles (Diesel) Upto 4m in Length and Upto 1500cc engine
|
28
|
|
Passenger vehicles (Above 1500cc engine)
|
28
|
|
SUVs (Above 4m in length, above 1500cc engine & >170 mm ground clearance)
|
28
|
|
Hybrid passenger vehicles (up to 4m and up to 1200cc petrol engine or 1500cc diesel engine)
|
28
|
|
Hybrid passenger vehicles (Above 4m and 1200cc petrol engine or 1500cc diesel engine)
|
28
|
GST rates significantly impact the on-road price of the vehicle. The final cost also includes the manufacturing cost, dealer’s profit margin, registration fees, road tax, car insurance policy and any optional accessories or charges.
Conclusion
Understanding the GST on cars is vital for making informed purchasing decisions in India. By calculating the applicable GST and additional charges, buyers can anticipate the total cost. Moreover, investing in a robust comprehensive or third-party car insurance policy provides peace of mind, protecting against potential risks and liabilities.
FAQs
Q1: Are electric vehicles (EVs) taxed differently?
Yes. EVs attract a lower GST rate of 5% without any additional cess, promoting eco-friendly transportation.
Q2: Does the GST rate vary across states?
No. GST is a centralised tax; however, state-specific charges like road tax and registration fees can differ.
Q3: Is GST the same for passenger and transport vehicles?
Yes, the GST rate is the same for passenger and transport vehicles.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.