NEW DELHI, Sept. 11 (Xinhua) -- Vehicles, including two-wheelers, cars and commercial vehicles, would soon get cheaper in India after the federal government announced reforms in goods and services tax (GST), thus significantly reducing the tax component, an official statement said on Thursday.
As per the tax reforms, GST on two-wheelers, including bikes up to 350 cc, and small cars had been reduced from 28 percent to 18 percent, while GST on large cars was reduced to flat 40 percent with no cess.
Cess is a type of tax which is deposited in the "Consolidated Fund of India" predominantly utilized toward various schemes of the federal government through various Reserve Funds.
According to the statement, GST on majority of automotive components used in manufacturing motor cars and motor bikes was also reduced to 18 percent.
For tractors (used in agricultural activities) lower than 1800 cc, GST was reduced from 12 percent to 5 percent, while road tractors for semi-trailers with engine capacity of more than 1800 cc was reduced from 28 percent to 18 percent.
The GST rationalization for automobile sector would help foster economic growth and innovation, advance micro, small and medium enterprises participation, and realize the federal government's vision of Self-Reliant India, the federal government said in the statement.
