Maruti Suzuki India, the country’s largest carmaker, has reduced the prices of its vehicles by up to 3% to pass on the benefits of the new Goods and Services Tax (GST) to customers. This revision makes several of the company’s most popular models, including the Alto, Swift, and Baleno, more affordable for buyers across the nation. The updated prices came into effect on July 1, 2017, coinciding with the nationwide rollout of GST.
Key Takeaways
• Maruti Suzuki has cut ex-showroom prices across most of its model range.
• The overall price reduction is up to 3%, varying by model and state.
• The move follows the implementation of the Goods and Services Tax (GST).
• Prices for mild-hybrid diesel models like the Ciaz and Ertiga have increased.
The price cut stems directly from the GST reform, which combined a range of central and state taxes such as excise duty, VAT, and octroi into a single tax structure. For most vehicles, the new GST rate is lower than the total tax burden that existed earlier. Under the new system, cars are taxed at a base rate of 28%, with an additional cess applied depending on the vehicle’s length, engine size, and fuel type.
For customers, this means a genuine saving. In Delhi, for example, ex-showroom prices for the Maruti Suzuki Swift have dropped by around ₹4,000 to ₹7,000, depending on the variant. The Baleno hatchback also saw a reduction in price. Maruti Suzuki has chosen to pass the entire benefit of the lower tax directly to buyers, a decision that could give sales an encouraging boost.
However, not all models gained from the new structure. Maruti Suzuki’s mild-hybrid models, specifically the diesel versions of the Ciaz sedan and the Ertiga MPV fitted with SHVS (Smart Hybrid Vehicle by Suzuki) technology, have become more expensive. These cars had earlier received tax benefits under the FAME India scheme, which promoted eco-friendly vehicles. With GST, those concessions were removed, and mild-hybrids were placed under a higher tax bracket of 28% GST plus a 15% cess. The outcome has been a sharp price hike of more than ₹1 lakh for these models.
For the typical car buyer considering a standard petrol or diesel vehicle, though, GST has brought mostly positive news. With simplified taxation and lower overall costs, it may well be the right time for many to make the decision to purchase a new car.
Frequently Asked Questions (FAQs)
Q. Why did Maruti Suzuki cut its car prices?
A. Maruti Suzuki reduced prices to pass on the cost benefits from the lower tax rate under the new Goods and Services Tax (GST) system to its customers.
Q. How much cheaper did the Maruti Swift get after GST?
A. The price of the Maruti Swift was reduced by up to 3%, which translates to a saving of several thousand rupees depending on the variant and the state of purchase.
Q. Did all Maruti cars become cheaper after GST?
A. No. While most standard petrol and diesel models became cheaper, the diesel variants of the Ciaz and Ertiga with SHVS (mild hybrid) technology became more expensive because they lost their earlier tax concessions.
Q. What is GST and how does it affect car prices?
A. GST, or Goods and Services Tax, is a single indirect tax that replaced many central and state taxes in India. For the auto industry, it created a unified tax structure, which for most cars was lower than the previous combination of taxes, leading to lower ex-showroom prices.
Q. Why did hybrid car prices increase after GST?
A. Mild-hybrid cars like the Maruti Ciaz SHVS saw a price increase because the special tax benefits they enjoyed under the pre-GST FAME India scheme were discontinued. They were placed into a higher tax bracket under the new GST system.
