GST impact: Massive discounts on car prices as customers postpone purchases till 1 July
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New Delhi: The GST impact has started showing on car prices. Several carmakers, including Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Mahindra and Mahindra Ltd and Ford India, are offering limited period discounts of up to Rs2.5 lakh across a range of vehicles to woo customers who have postponed purchases to avail lower prices after GST implementation on 1 July.
These discount schemes are valid for June only.
Dealers of the country’s largest carmaker, Maruti Suzuki, are offering discounts between Rs25,000 and Rs35,000. The highest discount is offered on its entry-level hatchback Alto. Similarly, Mahindra is offering benefits ranging between Rs27,000 on Scorpio to Rs90,000 on XUV500 till 30 June.
Hyundai dealers are offering discounts ranging between Rs25,000 on Elite i20 and all-new Xcent to Rs2.5 lakh on premium SUV SantaFe. The carmaker is offering discount of Rs45,000 on entry-level model Eon, up to Rs73,000 on Grand i10 and Rs90,000 on mid-sized sedan Verna.
Honda Cars India is offering up to Rs14,500 discount on its hatchback Brio, Rs50,000 on compact sedan Amaze, Rs17,000 on premium hatchback Jazz and Rs60,000 on B-RV under a special scheme valid only in June.
“We are giving price protection to the customers for cars retailed from 10 June to 30 June, which means that customers will buy the car at pre-GST price now. Post GST implementation whatever the difference in ex-showroom price it will be returned back to the customer by the dealer,” a Honda Cars India spokesperson said.
Ford India is offering discounts of up to Rs30,000 on its compact SUV EcoSport, sedan Aspire and hatchback Figo to pass on benefits of new tax rates under the goods and services tax. The company is offering discount on EcoSport in the range of Rs20,000 to Rs30,000.
On the other hand, Figo and Aspire are cheaper in the range of Rs10,000 to Rs25,000, depending on the variant. Japanese carmaker Nissan’s dealers are also offering benefits of up to Rs80,000 on sports Terrano and around Rs25,000 on Micra.
Industry analysts said the companies have been forced to come up with the discounts as potential customers have held back on purchases expecting prices to come down after GST implementation.
A 28% GST rate on cars will be applicable on all cars, with a cess of 1%-15% as applicable across price brackets.
While small petrol cars with engine less than 1,200 cc will attract 1% cess, that with a diesel engine of less than 1,500 cc will attract 3% cess. Large cars with engine larger than 1,500cc and SUVs with length more than 4 metres and engine greater than 1,500cc will attract a cess of 15%.
German luxury carmaker Audi has already slashed prices of its models in India by up to Rs10 lakh till 30 June. Rival BMW also said it is offering “benefits up to 12%” on ex-showroom prices that include GST benefits, depending on choice of the model.
Besides, Mercedes-Benz has announced reduction of prices of its vehicles produced in India by up to Rs7 lakh. Tata Motors-owned Jaguar Land Rover (JLR) has cut prices of select models by up to Rs10.9 lakh with immediate effect to pass on benefits of new tax rates under GST.
In the two-wheeler space, niche bike maker Royal Enfield is pre-emptively extending GST benefits to its customers and is ready to implement the on-road price revision on purchases beginning 17 June on products where applicable.
Bajaj has already announced reduction in prices of its motorcycles by up to Rs4,500 with immediate effect to pass on the expected benefit of GST to customers.