GST cut makes small cars cheaper; showrooms see record rush on first day of Navratri

Buying a car became cheaper from Monday, September 22, as new GST rates came into force. Small cars under four metres now attract 18 per cent GST instead of 28 per cent plus cess, while bigger vehicles are taxed at 40 per cent with the cess removed.

Carmakers said they would pass on the full benefit to buyers. Tata Motors cut prices by up to Rs 1.55 lakh across models, and Mahindra also said it would pass on the full benefit.

The new rates took effect on the first day of Navratri, and showrooms were crowded. Maruti Suzuki reported about 80,000 enquiries and close to 30,000 deliveries in a single day.

Maruti's senior executive Partho Banerjee said the company had not seen such a response from customers in 35 years. Hyundai reported about 11,000 vehicles billed on the first day and Tata Motors about 10,000 cars delivered.

First-time buyers gain the most, because the biggest savings are on small cars.