GST 2.0: GST on small vehicles (beneath 1,200cc/4,000 mm) and entry-level bikes (as much as 350cc) has been reduce from 28% to 18%, making them extra inexpensive. Automakers like Maruti Suzuki, Hero MotoCorp, Honda Bike & Scooter India, Bajaj Auto, and TVS Motor are anticipated to profit.
The revised GST charges on small vehicles and entry-level bikes, as much as 350 CC, have been decreased from 28 per cent to 18 per cent, making each segments cheaper for customers.
Corporations like Maruti Suzuki India which have the utmost variety of small vehicles of their portfolio might acquire from the revised charges, whereas Hero MotoCorp, Honda Bike & Scooter India, Bajaj Auto and TVS Motor India would acquire momentum within the entry-level bikes.
Two-slab GST construction efficient Sept 22; PVs beneath 1,200cc at 18%
The GST Council, in its assembly on Wednesday, has authorised limiting the slabs to five per cent and 18 per cent, efficient from September 22, the primary day of Navaratri this yr.
Passenger autos (PVs) working on Petrol, LPG, and CNG, with a capability of lower than 1,200 CC and a size of no more than 4,000 mm, and Diesel autos with a capability of as much as 1,500 CC and a size of 4,000 mm, would transfer to the 18 per cent price from the present 28 per cent.
Larger vehicles, SUVs, bikes above 350cc face 40% levy
All autos above 1,200 CC and longer than 4,000 mm, in addition to bikes above 350 CC and racing vehicles, shall be charged with a 40 per cent levy. Small hybrid autos may even profit, whereas the GST of 5 per cent on electrical autos (EVs) stays unchanged.
Presently, vehicles are taxed at 28 per cent, which is the best GST slab, and a compensation cess starting from 1 to 22 per cent is levied on prime of this price, relying on the kind of car.
The entire tax incidence on vehicles, relying on engine, capability and size, ranges from 29 per cent for small petrol vehicles to 50 per cent for SUVs.
EVs stay at 5%; hybrid vehicles profit; tractors, farm equipment cheaper
“We admire the continuation of the 5 per cent GST price on EVs, which is a important enabler of India’s clear mobility imaginative and prescient. This measure will additional speed up the adoption of EVs and reinforce India’s management in sustainable, inexperienced transportation,” Rajesh Jejurikar, Govt Director and Chief Govt Officer-Auto and Farm Sector at Mahindra & Mahindra (M&M), stated.
He additionally stated the transfer makes tractors and farm equipment extra inexpensive for farmers, reduces prices for industrial autos and improves accessibility for private mobility via rationalisation of charges throughout all sports activities utility autos (SUVs).
Santosh Iyer, Managing Director and Chief Govt Officer, Mercedes-Benz India, stated, “Authorities listened to the automotive business’s lengthy standing want checklist of rationalising GST charges. This GST revision is the step in proper course, is progressive and can induce the much-needed impetus by boosting consumption and convey momentum to the automotive business which primarily stays the heart beat of the Indian economic system.”
He additionally stated preserving the GST price for BEVs (battery electrical autos) unchanged would guarantee “sooner transition to a decarbonised future.”
Auto elements moved to 18%; curb gray market, assist MSMEs
GST on auto elements has been decreased from 28 per cent to 18 per cent, and based on business veterans, this transformation will assist curb the gray market, ease compliance, assist MSMEs, and improve the worldwide competitiveness and resilience of India’s automotive part business.
“Automotive Part Producers Affiliation of India (ACMA) welcomes the federal government’s choice to convey all auto elements beneath a uniform 18 per cent GST slab — a long-standing advice of the business,” Vinnie Mehta, Director Common, ACMA, stated.
Saurabh Agarwal, Associate & Automotive Tax Chief, EY India for the Auto sector, stated that by making autos extra inexpensive throughout all segments, the transfer won’t solely increase client spending but additionally simplify advanced classification disputes which have lengthy burdened the business.
“The discontinuance of the cess is a very pragmatic step, which can present much-needed assist to a sector that could be a important contributor to our nation’s GDP. Whereas this transformation is broadly constructive, the automotive business should now rigorously reassess the monetary affect of state incentives and subsidies, which are sometimes linked to GST charges,” he stated, including that this may occasionally necessitate a renegotiation with State governments to deal with potential adjustments in prices and clawback intervals.
Printed on September 4, 2025
