NEW DELHI - Vehicles ranging from two-wheelers and cars to commercial vehicles will soon become cheaper in India after the federal government announced goods and services tax (GST) reforms that significantly cut the tax burden, an official statement said on Thursday, reported Xinhua.
As per the tax reforms, GST on two-wheelers, including bikes up to 350 cc, and small cars had been reduced from 28 per cent to 18 per cent, while GST on large cars was reduced to a flat 40 per cent with no cess.
Cess is a type of tax which is deposited in the "Consolidated Fund of India" and predominantly utilised toward various schemes of the federal government through designated Reserve Funds.
According to the statement, GST on the majority of automotive components used in manufacturing motor cars and motor bikes was also reduced to 18 per cent.
For tractors (used in agricultural activities) lower than 1800 cc, GST was reduced from 12 per cent to 5 per cent, while road tractors for semi-trailers with an engine capacity of more than 1800 cc were reduced from 28 per cent to 18 per cent.
The GST rationalisation for the automobile sector would help foster economic growth and innovation, advance micro, small and medium enterprises participation, and realise the federal government's vision of a Self-Reliant India, the federal government said in the statement. - BERNAMA-XINHUA