Are MG Windsor Prices Going To Rise By More Than 2 Lakh With GST Revision? We Explain

The Indian government’s proposed GST (Goods and Services tax) revision has been creating headlines recently. It is expected to bring about major revisions in car and bike prices here. Small petrol cars with engine capacities of under 1200cc will benefit from a lower tax slab, which could significantly bring down their prices. The current rumours, however, do not say how the revised tax slabs will affect electric vehicles. The marketing material released by an MG dealer suggests that the GST on the hot-selling Windsor EV could go up post-revision. At the time of writing this article, it remains unclear as to what direction the government would take with GST on electric vehicles.

MG Windsor EV Prices To Go Up With GST Revision?

The poster here seems to be marketing material from Crystal MG, a dealer that has a presence in Uttar Pradesh and Delhi. It shows a Windsor EV alongside a few lines of text. It reads ‘ GST Update On EVs. GST on premium electric vehicles may soon cost Rs 2 lakh+ more as GST is expected to rise from 5% to 18%. Take delivery of your EV today, before the higher GST hits your wallet.’

The Windsor EV is, in fact, the best-selling electric car in India. It is currently priced in the range of Rs 13.99 lakh- 16.29 lakh (ex-showroom). Windsor Pro- the long range version costs up to Rs 18.39 Lakh, ex-showroom.

Clearly, the Windsor EV is a sub-20 lakh EV. Currently, a GST of 5 per cent applies to the Windsor. This is in fact, a concessional slab which was imposed on it, to promote adoption.

A recent report by Business Today says that the Group of Ministers (GoM) on rate rationalisation recommended increasing the GST on premium electric cars steeply.

A draft report submitted to the 56th GST Council has the details of this. It goes on to say that electric vehicles priced between Rs 20 lakh and Rs 40 lakh ( referred to as ‘premium EVs’) will now face a GST of 18%, a steep climb from the current 5%.

This means that electric vehicles like the Harrier.EV and Mahindra XEV 9e will get pricier to own, under the revised slabs. The Harrier.EV, for example , currently has a starting ex-showroom price of Rs 21.49 lakh. This includes a 5% GST. With the revised slab, it could cost Rs 24.09 lakh, ex-showroom for the base variant (Rs 2.6 lakh more than the present price).

The XEV 9e on the other hand, has an ex-showroom price of Rs 22.65 lakh for the base variant (Pack ONE B59). Post revision, this could increase to Rs 25.39 lakh, ex-showroom.

The move is expected to bring about further differentiation between everyday EVs and aspirational EVs. This revision in GST will thus affect EV segments with high footfalls.

The GoM even argued that the current GST slab disproportionately benefits buyers of high-end electric vehicles. While concessional GST rates can boost adoption and benefit budget EV owners, they can also cause revenue losses from high-end EV purchases.

For now, these remain mere proposals from the GoM and will be taken up at the Council meeting, where further discussions will happen. The actual price revision will occur only if these are accepted by the council.

The Tricky Part

Let’s now see why this dealer ad is so wrong! Even if the proposals made by the GoM go through without any modifications, the 18% slab will likely apply to just EVs which cost more than 20 lakh rupees. As mentioned above, all variants of the Windsor EV are priced under 20 lakh.

This means that it is unlikely to qualify for the higher slabs. The creative that you see here is likely a clever marketing tactic used by the dealer to boost sales before the upcoming tax revision.

The Real Picture Remains Unclear

As of now, the specifics of the proposed GST revision are unclear. There are a lot of rumours and reports around. The uncertainty has casted a notable impact on car and bike sales.

People seem to be holding themselves back from making the purchase, and are likely waiting to get clarity on the new slabs. We expect the government to come up with the official announcement during the festive season.