GST Cess Hike on Larger Cars, SUVs; Small Cars Unaffected

The GST council has increased the cess rate on larger and mid-sized cars in India from 2 percent to 7 percent. With this hike in cess rates, the cars in the mentioned segment will witness the increase in prices by upto INR 2 lakh.

For your information, the small cars prices including cars with petrol engines upto 1200cc and vehicles with diesel engines upto 1500cc, are not likely to be changed. They will attract the same 43 percent GST rates (28 percent GST+15 percent Cess).

While, the mid-sized cars with the new cess rates will levy new total of 45 percent (28 per cent GST+17 per cent Cess) with an increase of 2 percent cess. The luxury cars that is a separate segment excluding SUVs will receive the new 48 percent GST rates (28 per cent GST + 20 per cent Cess) with the addition of 5 percent for the new buyers. The SUV in all other categories gets the major plunge of 7 percent, the new GST rates for this genre is 50 per cent (28 per cent GST+22 per cent Cess).

Check out the detailed GST rates after revision

Body StyleOld GST RatesNew GST Rates
All sub 4-Metre Vehicles (petrol less than 1.2-litre) 29% (28% GST+1% Cess) 29% (28% GST+1% Cess)
All sub 4-Metre Vehicles diesel less than 1.5-litre) 31% (28% GST+3% Cess) 31% (28% GST+3% Cess)
All sub 4-Metre Vehicles (petrol more than 1.2-litre/diesel more than 1.5-litre) 43% (28% GST+15% Cess) 43% (28% GST+15% Cess)
Cars longer than 4-Metres 43% (28% GST+15% Cess) 45% OR 48% (28% GST+17% Cess) OR (28% GST +20% Cess)
SUVs longer than 4-Metre 43% (28% GST+15% Cess) 50% (28% GST+22% Cess)
Hybrid Vehicles 43% (28% GST+15% Cess) 43% (28% GST+15% Cess)
Electric Vehicles 12% (only 12% GST) 12% (only 12% GST)


Well, the GST council did not make clear that which cars will be included in the mid-sized cars and what in luxury cars, but it is obvious from the new cess rates that the every SUV over the 4-meter segment will fall in higher tax bracket. This hike in GST rates can be turned out as a barrier for the manufacturers as the festive season is around the corner. Well, this gradual and step by step increase in cess rate is far better than the flat 10% hike initially proposed by the Union Cabinet. In coming future we can see the most certain variations in the buying culture of the audience as the increase in cars prices is across the board.

Here are a few models which will estimatedly be expensive post this cess rates revision

CarHike in CessTotal TaxHike in Price
Maruti Suzuki Ciaz 2% 45% 15,000
Hyundai Creta 7% 50% 63,000
Hyundai Verna 2% 45% 16,000
Honda City 2% 45% 17,000
Mahindra Scorpio 7% 50% 67,000
Renault Duster 7% 50% 58,000
Toyota Innova 7% 50% 94,000
Toyota Fortuner 7% 50% 1,71,000
Volkswagen Tiguan 7% 50% 2,00,000