The Government of India implemented the new GST rates on the 1st of July 2017, post which most of the vehicles sold in India were expected to receive a price reduction. While other manufacturers like – Maruti Suzuki, Tata Motors, Honda, Toyota, Hyundai, BMW India, Jaguar Land Rover, have already announced price reduction, utility vehicle maker Mahindra and Mahindra becomes the latest car maker to join them. The implementation of Goods and Service Tax (GST) has turned out to be highly favourable for the home-grown car manufacturer. The automaker offers both SUVs and electric vehicles in India, two segments that have received the highest tax benefits post the launch of GST.
Now, the company has decided to pass on those benefits to its customers by announcing price reduction across its model range in India. While the company is yet to announce model-wise price reduction, overall prices of Mahindra UVs and SUVs have been reduced by an average of 6.9 per cent, while those that come under small car segment have been reduced by an average of 1.4 per cent.
With the GST common into effect, prices cars now fall under the 28 per cent slab, irrespective of make, model, engine capacity, or body type. Over and above this 28 per cent, there will be and addition cess levied upon them, either 1 per cent, 3 per cent or 15 per cent, depending on the segment that the car model falls under.
As Mahindra’s top players – the XUV500 and Scorpio fall under the 4 metre and above category they receive an additional cess of 15 per cent, resulting in a total of 43 per cent, which is still 12 per cent less than the previous tax structure. This means the XUV500 and Scorpio will see a considerable drop. On the other hand sub-4 metre models like the TUV300, NuvoSport, which get the 1.5-litre diesel engines, also fall under the 15 per cent cess bracket bringing the overall tax reduction to just 1.7 per cent. The Mahindra KUV100 at the same time falls under the 1 per cent cess bracket with its 1.2-litre petrol and diesel engines.
Electric vehicles, on the other hand, come under the 12 per cent GST slab, seeing a tax drop of 7.5 per cent from the earlier 20.5 per cent. Having said that, Mahindra Electric, the EV arm of Mahindra and Mahindra is yet to announce the price reductions on the e2o Plus and e-Verito.
Commenting on the company’s decision, Dr Pawan Goenka, Managing Director, Mahindra and Mahindra Ltd. applauded the implementation of GST in India and said, “We believe this landmark reform will significantly improve the ease of doing business and Indian competitiveness. It will also benefit consumers, thus being a win-win for all. The transition to GST has been seamless for M&M.”