Goods and Services Tax (GST) currently applies to most goods and services in India including motor vehicles. GST on cars in India is applicable on multiple slab rates of 5%, 12%, 18%, and 28%. The most relevant GST rate on cars is 28% that applies to motor vehicles including those for personal as well as commercial use. Additionally, a compensation cess of up to 22% may be levied on cars in addition to the 28% GST that is applicable. Hence, the maximum rate effectively can increase to as high as 50% in some cases.
GST rates have been defined for used cars as well. Recently in the 36th GST council meeting, it was decided to reduce rates on electric cars to 5%, which is seen as a drastic boost to the automobile industry and electric vehicles in specific.
GST on Cars for Personal Purpose.
GST Rate on Electric Vehicles and Electric Cars.
GST Compensation Cess on Cars.
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