Small cars may get cheaper by 8% if GST reduced from current rate: HSBC Report
The prices of small cars in India could see a reduction of about 8 per cent if the government decides to bring down the current Goods and Services Tax (GST) rate from 28 per cent to 18 per cent, according to a report by HSBC.
The report highlighted that in the present structure, passenger vehicles (PVs) attract GST in the range of 29 per cent to 50 per cent, as a cess is imposed on top of the standard 28 per cent GST rate depending on the size and length of the vehicle.
HSBC noted that under a new regime, the government may consider reducing the tax on smaller cars to 18 per cent from 28 per cent, while for larger cars, a "special rate" of 40 per cent could be introduced with the cess being cancelled.
If this change takes place, smaller cars may see their prices come down by close to 8 per cent, while bigger cars could become cheaper in the range of 3-5 per cent.
