Car GST Calculator India

1. What is the current GST rate on cars in India?

The base GST rate on all cars in India is 28%. However, an additional tax called Compensation Cess is applied on top of the GST, ranging from 1% to 22% depending on the car’s type, length, engine capacity, and ground clearance. This makes the total tax incidence range from 29% to 50% for internal combustion engine vehicles.

2. How is GST calculated on the ex-showroom price?

The ex-showroom price you see at the dealership already includes the GST and Cess. To find the actual tax amount, you must perform a reverse calculation.

• Formula: Base Price = Ex-Showroom Price / (1 + (Tax Rate / 100))
• Tax Amount: Ex-Showroom Price - Base Price Our calculator automates this to show you exactly how much of your payment goes toward government taxes.

3. What is the GST rate for Electric Vehicles (EVs) in India?

Electric Vehicles (EVs) enjoy the lowest tax bracket. The GST on EVs is set at 5% with 0% Cess. This is significantly lower than petrol or diesel cars, which are taxed at a minimum of 29%.

4. Why is the tax on SUVs higher than small cars?

SUVs attract the highest tax rate due to the “Sin Tax” structure on luxury items. If a car meets three criteria—length > 4000mm, engine > 1500cc, and unladen ground clearance > 170mm—it attracts a 22% Compensation Cess on top of the 28% GST, bringing the total tax to 50%.

5. Does the ex-showroom price include RTO and Insurance?

No. The ex-showroom price includes the manufacturer’s cost, dealer margin, GST, and Cess. It does not include Road Tax (RTO), Registration fees, or Insurance. These are added specifically to calculate the final “On-Road Price.”

6. What is the definition of a “Small Car” for GST purposes?

For GST benefits (lower Cess), a “Small Car” is defined as a vehicle with a length of less than 4 meters.

• Petrol: Engine capacity must be < 1200cc (Total Tax: 29%).
• Diesel: Engine capacity must be < 1500cc (Total Tax: 31%).

7. Can businesses claim Input Tax Credit (ITC) on car purchases?

Generally, Section 17(5) of the CGST Act blocks Input Tax Credit (ITC) on motor vehicles used for passenger transport. However, exceptions exist if the business is in the specific trade of buying/selling cars, providing driving training, or transporting passengers commercially.

8. How does Ground Clearance affect car taxation?

Ground Clearance (GC) is a deciding factor for the SUV tax bracket. Even if a car is long and has a big engine, if its unladen ground clearance is below 170mm, it may not attract the highest 22% Cess rate, often falling into the 15% Cess category (Mid-size/Sedans).

9. Do I have to pay GST on used or second-hand cars?

Yes, but the rates are calculated differently.

• Small cars: 12% GST.
• Large cars/SUVs: 18% GST. This GST is usually calculated on the margin scheme (the profit margin of the dealer), not the full sale value.

10. Is GST applicable on car accessories and spare parts?

Yes, most car accessories and spare parts fall under the 28% GST slab regardless of the car type. Some specific electronic accessories might fall under 18%, but standard mechanical parts are usually taxed at the highest rate.