The Central Government has revised GST rates for the auto sector into three slabs — 5%, 18%, and 40%. This move is expected to boost the automobile industry, especially with its rollout just before the festive season.
Electric Vehicles (EVs) will continue to attract 5% GST.
Most passenger vehicles (including internal combustion and hybrid cars) will now fall under 18% GST, leading to an average price cut of about 8.5%.
Two-wheelers up to 350cc will also get cheaper, with prices expected to drop by around 7.8%.
Only a small segment of premium bikes above 350cc will become costlier, with an estimated price rise of about 6.9%.
Overall, this reform makes cars and bikes more affordable for most consumers, likely boosting sales during the festive season.
The government’s new GST rates mean different kinds of vehicles will now become cheaper (except for a very small premium category). Here’s what it means in plain terms:
Small/entry-level cars like Wagon R, Swift, Dzire, Punch → Prices will drop the most, by about 8.5%.
Medium cars/SUVs like Virtus, Brezza, Creta, Ertiga → Prices will go down a little less, by around 3.5%.
Premium SUVs and big family cars like XUV700, Innova → Prices will fall by around 6.7%.
Tractors and new-age hydrogen vehicles → Prices will reduce by about 6.3%.
Commercial vehicles (autos, trucks, buses, etc.) → Prices will reduce by around 7.8%.
Almost all vehicle types, including buses, tractors, and small hatchbacks, will become more affordable, albeit in varying proportions. This should lower the cost of purchasing a car, particularly before the holiday season.