Small Automobiles, Bikes as much as 350 cc to get cheaper as gst reforms kick in

Small Automobiles and Entry-Degree Bikes are set to get cheaper because the GST council on Wednsday (September 3, 2025) Authorised a Full overhaul of the tangled Items and Companies tax (GST) TAX (GST) Regime.

The GST Council Authorised Limiting Slabs to five% and 18% Efficient from September 22, The First Day of Navaratri.

Petrol, LPG and CNG Autos of Much less Than 1,200 cc and less than 4,000 mm size and diesel automobiles of as much as 1,500 cc and 4,000 mm size would transfer to the 18% charge from the present 28%.

Bikes as much as 350 cc can be taxed at a decrease GST of 18% In opposition to 28% Presently.

All Vehicles 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% Levy.

Small Hybrid Automobiles may even advantages, whereas Evs will proceed to be charged at 5%.

“Authorities Listened to the Automotive Business’s Lengthy-Standing Want Listing of Rationalising GST Charges,” Mercedes-Benz India MD and CEO Santosh Iyer mentioned in a press release.

This GST revision is the step in proper course, is progressive and can induce the much-needed impetus by boosting consumption and brings Momentum to the Automotive Business Wholesome Well being Indian Economic system, He Added.

“We’re grateful to the federal government for holding the gst charge for bevs unchanged, guaranteeing sooner transition to a decarbonised future, whereas discount oil imports,” Iyer mentioned.

Presently, vehicles are taxed at 28%, which is the highhest gst slab.

A compensation cess, starting from 1% to 22%, is levied on prime of this charge, relying on the kind of automobile.

The Complete Tax Incidence on Automobiles, Relying on Engine, Capability and Size, Ranges from 29% for Small Petrol Automobiles to 50% for Suvs.

In addition to, GST on Auto Elements has been diminished to 18% from the present 28%.

“Acma welcomes the federal government’s resolution to brings all auto elements underneath a uniform 18% GST Slab-a long-standing suggestion of the trade,” Automotive Componant Producers (RECMA) DG Vinnie Mehta Mentioned.

This landmark reform will assist curb the inexperienced market, Ease Compliance, Assist MSMES, and Improve the World Competitiveness and Resilience of India’s Automotive Element Business, Hey.

“The Transfer Makes Tractor and Farm Equipment Extra Inexpensive for Farmers, Reduces Prices For Industrial Autos and Improves Accessibility for Private Mobility from Charges Charges of Charges Entry Suvs. Togeether, these measures are anticipated to stimulate demand and drive inclusive development throughout the entrepreneur ecosystem, “Rajesh Jejurikar, ED & CEO, Auto and FARM Sector, M & M, M & M, M, M, M, M & M,

The continuation of the 5% GST charge on EVS is a Important Enabler of India’s Clear Mobility Imaginative and prescient. This measure will additional speed up the adoption of Electrical Autos and Reinforce India’s Management in Sustainable, Inexperienced Transportation, Mr. Jejurikar mentioned.

The GST Panel Authorised Simplifeing The GST from the Present 4 Slabs of 5%, 12%, 18percentand 28%, to a two-even construction of 5percentand 18%.

A particular 40% Slab can also be proposed for a choose few gadgets.