New Delhi, Sept 4: Small cars and entry-level bikes are set to get cheaper as the GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax (GST) regime.The GST Council approved limiting slabs to 5 per cent and 18 per cent effective from September 22, the first day of Navaratri.
Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length would move to the 18 per cent rate from the current 28 per cent.
Motorcycles up to 350 cc would be taxed at a lower GST of 18 per cent against 28 per cent currently.
All automobiles above 1,200 cc and longer than 4,000 mm as well as motorcycles above 350 cc and racing cars will be charged with a 40 per cent levy.
Small hybrid cars will also benefit, while EVs will continue to be charged at 5 per cent.
“Government listened to the automotive industry’s long-standing wish list of rationalising GST rates,” Mercedes-Benz India MD and CEO Santosh Iyer said in a statement.