New Delhi, Aug. 19 -- The prices of small cars in India could see a reduction of about 8 per cent if the government decides to bring down the current Goods and Services Tax (GST) rate from 28 per cent to 18 per cent, according to a report by HSBC.

The report highlighted that in the present structure, passenger vehicles (PVs) attract GST in the range of 29 per cent to 50 per cent, as a cess is imposed on top of the standard 28 per cent GST rate depending on the size and length of the vehicle.

HSBC noted that under a new regime, the government may consider reducing the tax on smaller cars to 18 per cent from 28 per cent, while for larger cars, a "special rate" of 40 per cent could be introduced with the cess being cancelled.

If this chan...