The middle class may soon see a meaningful price cut on small cars. The government is reportedly considering a GST reduction from 28% to 18% for small cars, which would translate into a 10% direct tax cut. If implemented, popular Maruti Suzuki Arena models like Alto K10, WagonR, Swift and Dzire could become significantly more affordable.
How the math works: Suppose a car’s base (ex-factory) price is ₹5,00,000. Currently, 28% GST plus 1% cess (total 29%) takes the final price to about ₹6,45,000. If GST drops to 18% (assuming 1% cess → 19% total), the price would be around ₹5,90,000 — a saving of roughly ₹55,000. The higher the base price, the bigger the absolute saving.
Dealers expect improved festive demand if the cut is approved. For first-time buyers and budget-focused families, lower upfront prices improve affordability and may also ease the on-road cost burden when combined with offers, finance schemes and extended warranties.
| Car Model | Current Ex-Showroom | Current Tax (29%) | New Tax (19%) | Expected Saving | New Expected Price |
|---|---|---|---|---|---|
| Alto K10 | ₹4,23,000 | ₹1,22,669 | ₹80,370 | ₹42,299 | ₹3,80,701 |
| S-Presso | ₹4,26,500 | ₹1,23,684 | ₹81,035 | ₹42,649 | ₹3,84,851 |
| Celerio | ₹5,64,000 | ₹1,63,560 | ₹1,07,160 | ₹56,400 | ₹4,56,840 |
| Eeco | ₹5,69,500 | ₹1,65,155 | ₹1,08,205 | ₹56,950 | ₹4,61,295 |
| WagonR | ₹5,78,500 | ₹1,67,765 | ₹1,09,915 | ₹57,850 | ₹4,68,585 |
| Swift | ₹6,49,000 | ₹1,88,210 | ₹1,23,310 | ₹64,900 | ₹5,85,690 |
| Dzire | ₹6,83,999 | ₹1,98,359 | ₹1,29,959 | ₹68,400 | ₹6,14,040 |
| Brezza | ₹8,69,000 | ₹2,52,009 | ₹1,65,110 | ₹86,899 | ₹7,82,101 |
| Ertiga | ₹9,11,500 | ₹2,64,335 | ₹1,73,185 | ₹91,150 | ₹8,20,850 |
Note: These are indicative calculations using 29% current tax (28% GST + 1% cess) vs. 19% assumed new tax (18% GST + 1% cess). Actual prices may vary by variant, region, and any additional levies/discounts.
Summary:
- Government may reduce GST on small cars from 28% to 18% (assumed with 1% cess = 19% total).
- Maruti Arena cars like Alto K10, WagonR, Swift, Dzire, Brezza and Ertiga could get cheaper by ~₹40,000–₹90,000.
- Lower upfront prices can boost festive demand and improve affordability for first-time buyers.
- Final on-road prices depend on variant, location, insurance, registration and dealer schemes.
