The latest TPS reform in India reduces tax rates on most cars and two-wheelers from 28% to 18% from September 22, but premium buyers could pay more as high-end models move in a new 40% support.
The prices of entry -level and medium -sized vehicles should drop sharply as a result of the TPS council decision to reduce the goods and services tax on most cars. Small cars like Maruti Suzuki Alto, Hyundai Grand I10 and Tata Tiago – at the price typically between 5 and 7 Lakh – will see prices drop from 8 to 10%, reducing costs of 70,000 ₹.
Two-wheelers up to 350cc, including bestsellers like Honda Shine, Yamaha FZ, TVS Apache and Bajaj Pulsar, will also benefit from the lowest tax. A reduction of 10% on a bicycle of 1 lakh could mean a saving of 10,000 ₹.
But tax relief is delivered with a warning: luxury cars, large SUVs and motorcycles greater than 350cc can now attract a TPS rate up to 40%. This change could push higher prices for models like the Royal Enfield 650cc, KTM 390 and Harley Davidson, with expected increases from 10 to 12% or more in their road prices.
A ₹ 3.6 Lakh Royal Enfield 650, for example, could now cross the brand of 4 Lakh. On the other hand, the Classic 350, which remains below the 350cc threshold, can go from 2.25 Lakh to 2.05 Lakh. Medium -sized sedans at the price of approximately 15 Lakh can also benefit slightly, with a price drop of 3 to 5% resulting at 45,000 to 75,000 ₹.
While buyers concerned about the budget will benefit the most from the TPS Cup, this decision could limit enthusiasm in the premium segment. The reform, as of September 22, aims to make personal mobility more affordable for the ambitious middle class while continuing to extract a higher tax of luxury consumption.
