GST on Car 2026 — GST Rate on Vehicles, SUV, EV & Car Purchase Guide

Updated: 3 June 2026 | CGST Act + Compensation Cess Act | All Segments | Incl. TCS Rules

GST on cars is levied at 28% for all motor vehicles (except EVs), plus a compensation cess that varies by segment: Small petrol cars (≤1200cc, ≤4m) — 28% + 1% cess = 29%. Small diesel cars (≤1500cc, ≤4m) — 28% + 3% cess = 31%. Mid-segment cars (>4m, petrol ≤1500cc) — 28% + 15% cess = 43%. Large cars (>4m, petrol >1500cc) — 28% + 20% cess = 48%. SUVs (>4m, >1500cc, >170mm ground clearance) — 28% + 22% cess = 50%. Electric Vehicles (EVs) — 5% GST, no cess. Additionally, TCS at 1% applies on car purchases above ₹10 lakh under Income Tax Section 206C(1F).

5% vs 50%

5% GST on Electric Vehicles — vs 28% + 22% cess (50%) for petrol/diesel SUVs
No compensation cess on EVs. TCS at 1% applies separately on all cars priced above ₹10 lakh.

GST + Cess Rate on Cars — All Segments 2026

Vehicle Segment	Key Criteria	GST Rate	Cess	Total Tax
Electric Vehicles (EV)	Battery-operated, any size	5%	Nil	5%
Small petrol/CNG/LPG car	≤1200cc engine, length ≤4m	28%	1%	29%
Small diesel car	≤1500cc engine, length ≤4m	28%	3%	31%
Mid-segment car (petrol)	>4m length, petrol engine ≤1500cc	28%	15%	43%
Mid-segment car (diesel)	>4m length, diesel engine ≤1500cc	28%	15%	43%
Large/luxury car (petrol)	>4m length, petrol engine >1500cc	28%	20%	48%
Large/luxury car (diesel)	>4m length, diesel engine >1500cc	28%	20%	48%
SUV	>4m length, engine >1500cc, ground clearance >170mm	28%	22%	50%
Hybrid vehicles (mild/strong)	Petrol-electric hybrid, engine varies	28%	15–43%	43–71%
Three-wheelers (petrol/diesel)	Auto-rickshaw, cargo 3-wheeler	28%	1%	29%
Electric three-wheelers	E-rickshaw, electric auto	5%	Nil	5%
Ambulance	—	12%	Nil	12%

Popular Car Models — Indicative GST Segment

Car Model	Fuel	Segment	Effective GST
Maruti Alto K10 / S-Presso	Petrol	Small (<1200cc, <4m)	29%
Tata Tiago / Maruti WagonR	Petrol/CNG	Small (<1200cc, <4m)	29%
Hyundai i20 / Maruti Baleno	Petrol	Mid (>4m, ≤1500cc)	43%
Honda City / Maruti Ciaz	Petrol	Mid (>4m, ≤1500cc)	43%
Toyota Innova Crysta	Diesel	Large (>4m, >1500cc)	48%
Mahindra Thar / Scorpio-N	Diesel	SUV (>170mm clearance)	50%
Tata Nexon EV / MG ZS EV	Electric	EV (any size)	5%
Hyundai Creta Electric	Electric	EV	5%

TCS on Car Purchase Above ₹10 Lakh

Under Section 206C(1F) of the Income Tax Act, dealers must collect Tax Collected at Source (TCS) at 1% on the sale consideration of any motor vehicle exceeding ₹10 lakh. Key points:

TCS is collected on the ex-showroom price (including GST and cess), not just base price
It applies when a single transaction value exceeds ₹10 lakh — not cumulative purchases
TCS is credited to the buyer's Form 26AS and can be claimed as income tax credit
TCS rate for NRI buyers may differ — check with dealer
TCS is separate from GST — both are payable on luxury/premium car purchases

Frequently Asked Questions

What is the GST rate on a small petrol car?

Small petrol cars meeting all three criteria — engine capacity up to 1200cc, length up to 4 metres, and petrol/CNG/LPG fuel — attract 28% GST plus 1% compensation cess, making the effective rate 29%. Examples include Maruti Alto, WagonR (base variants), and Tata Tiago. If any one criterion is not met (e.g., length exceeds 4m), the car moves to the mid-segment or large car category with a higher cess rate.

What is the GST rate on electric vehicles (EVs)?

Electric vehicles (EVs) attract only 5% GST — the lowest rate among all vehicle categories. There is no compensation cess on EVs. This applies to all battery-operated electric cars, two-wheelers, three-wheelers, and buses. The reduced rate was introduced to incentivise EV adoption in India. EV chargers and charging services also attract 5% GST. Hybrid vehicles do NOT get this benefit and are taxed at 28% GST plus applicable cess (varying from 15% to 43% depending on displacement and vehicle type).

What is TCS on car purchase above ₹10 lakh?

Under Section 206C(1F) of the Income Tax Act, a car dealer must collect Tax Collected at Source (TCS) at 1% on the sale of a motor vehicle with a consideration (ex-showroom price) exceeding ₹10 lakh. TCS is collected at the time of receipt of payment. The TCS amount is reflected in Form 26AS of the buyer and can be claimed as credit against their total income tax liability while filing returns. TCS is NOT GST — it is an income tax provision. Both GST and TCS are payable on luxury car purchases.

Can a car dealer claim Input Tax Credit (ITC) on vehicles?

No. Section 17(5) of the CGST Act blocks ITC on motor vehicles used for transportation of persons with seating capacity up to 13 persons (including driver), unless the vehicle is used for specific purposes such as: further supply of vehicles (i.e., the dealer's own business of selling cars), transportation of passengers (taxi/cab operators), or imparting driving training. So a regular business buying a car for employee transport CANNOT claim ITC. A car dealer (buying cars as stock-in-trade) CAN claim ITC on the purchase price.

What is GST on purchase of a second-hand (used) car?

GST on used/second-hand cars applies only to dealers (registered persons dealing in second-hand vehicles) and is charged on the margin (profit) — i.e., the difference between selling price and purchase price. If a dealer sells a second-hand car at ₹5L having bought it at ₹4L, GST applies on ₹1L margin only. Rates: Small petrol cars (≤1200cc, ≤4m): 12% on margin. Small diesel cars (≤1500cc, ≤4m): 12% on margin. All other vehicles: 18% on margin. If the margin is negative (selling at a loss), no GST is payable. Private individual-to-individual sale of a used car is NOT subject to GST.

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