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  4. GST on used car raised to 18 per cent: Still, you won't have to pay more? Here's why

GST on used car raised to 18 per cent: Still, you won't have to pay more? Here's why

The GST Councill meeting was held on Saturday with Finance Minister Nirmala Sitharaman as chair. In the meeting, the tax slab for used car has been changed.

Edited By: Shubham Bajpai New Delhi Published : Dec 22, 2024 13:59 IST, Updated : Dec 22, 2024 14:10 IST
GST on used cars increased to 18 per cent
Image Source : PTI/FILE Finance Minister Nirmala Sitharaman led GST Council increased tax on used cars

The 55th Goods and Services Tax Council (GST) Council meeting concluded on Saturday approved to elevate slab for selling/buying old car. As per the decision, the rate has been increased from 12 per cent to 18 per cent.

How will it affect the buyers?

This must be noted that used Petrol/CNG and LPG cars with an engine capacity above 1200 cc and a length of more than 4000mm are already under the ambit of 18 per cent GST. Similarly, the diesel vehicles and SUVs with a capacity of more than 1500cc are taxed at 18 per cent.

The latest inclusion decision by the GST Council affects those vehicles which are not under the ambit of above two conditions and are taxed at 12 per cent, like EVs. However, the ordinary buyer needs not to worry.

As per the council deliberations and decision, the inclusion is only limited to the business selling and purchasing.  Simply put, the business entities which sell or buy used vehicles claiming depreciation. So for now, the individual buyers and sellers have nothing to worry about unless they are purchasing it for or from a business entity.

Who would be affected?

However, still the industry experts believe that the latest decision could slower the market of used vehicle purchase. Therefore, the businesses which rely on depreciation benefits will have to devise new policies to adapt to higher tax impact. This would also affect those firms which are involved in purchasing the vehicle, repairing and maintaining, and then selling it off.

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