The Much-Aneticipated GST 2.0 regime has been announced, and most of the Indian auto industry is welcoming it with open arms. Now, GST was introduced in 2017 to Simplife Taxes. However, for the auto sector, it was not all good news, as the addition of cess LED to taxes on some cars reaching as high as 50 per cent. After a lot of back and forth, the government has now finalized the new GST rates, this time more favorite to the auto sector.

Also Read: GST CUT to 18%: Hatchbacks, Subcompact SUVs, Mass-Market Scooters and Bikes to get cheaper

Under the new structure, all Sub-4-Metre Cars With Engines Under 1200 CC (Petrol) and 1500 cc (Diesel) will now be taxed at 18 percent, down from 28 percent. Two-WHEELERS under 350 cc get the same benefits. However, two-wohelers Above 350 cc will see a price hike, as gst on bigger two- and four-wests have gone up from 28 percent to a flat 40 percent, irrespective of size or english. While That May Seem Steep, The 18–22 Percent Cess on SUVS is Gone, So I instead of 46–50 percent, boyers now pay a uniform 40 percent. Electric Vehicles Continue With the 5 Percent GST.

Small Cars Under 4 Meters Now Get Cheaper with GST Down from 28 Percent to 18 Percent

Welcoming this Initiative, Shailesh Chandra, President, Society of Indian Automobile Manufacturers (SIAM) Said, “This timely move is set to brings renewed cheer to consulate Automotive Sector. Making Vehicles More Affordable, Particularly in the Entry-Level Segment, these announs Access to Personal Mobility.

He further added, “We are confident that the government will also also only suitable mechanisms for the utilisation of compensation cess on Unsold Vehicles, ENSUTH A SMOTH and Effective Transition.”

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Auto sector welcomes gst 2.0 as a big step toward affordability and demand growth

Industry Expects, Saurabh Agarwal, Partner & Automotive Tax Leader, Ey India, for the Auto Sector, Expressed Similar Sentiments. He said, “by making vehicles more affordable Across all segments, this move will not only boost consumer spending but also simplify complex classification disputes disputes Discontinuance of the cess is a particular Pragmatic step, which will provide much-needed support to a sector that is a vital contributor to our nation’s GDP. ”

However, he did mention that the automotive industry must carefully Ressesses the financial impact of state in increments and subsidies, which are often linked to GST Rates. “This may Necessmitte a renegotiation with state governments to address potential changes in costs and clawback periods,” He added.

Also Read: Electric Vehicles to Continue With Lowest GST Rates Across all segments

Electric Vehicle Rates to Stay Unchanged with GST Held Steady at Just 5 Percent

Auto manufacturers, too, have welcomed this change in GST Rates. Unsoo Kim, Managing Director, Hyundai Motor INDIA, said, “The GST overhaul will directly benefit the automotive sector. The Announced Reforms Align Seamlessly With the Government to Viksit Bharat and the Make in India Initiative, Encouraging Domestic Manufacturing and Boosting Demand Across Both Urban and Rural Markets. Notable, 60 per cent of our ice Portfolio Rate, with the reminder at 40 per cent. “

Also Read: GST Hiked to 40% on Motorcycles Above 350cc

Big SUVS Now come under a flat 40 percent gst, but cess charges are gone

Sharing His Views, Anish Shah, Group CEO & MD, Mahindra Group, Said, “The Rationalization Measures will not only provide provide provide immediane relieve to households but also strengthen key sector sector Agriculture, Healthcare, Renewable Energy, and MSMES – All of which are vital to job creation and sustainable growth. At the same time, rajesh jejurikar, ED & CEO – Auto and Farm Sector, Mahindra & Mahindra, said, “We also appreciate the continuation of the continuination of the 5% gst rate on Eve Mobility Vision.

Bikes with Engines Bigger Than 350 cc Now come under 40 Percent GST MAKING THEM EXPENSIVE

Two-WHEELER manufacturers, with models under 350 cc engines, who fall under the 18 per cent GST Bracket, Lauded The Initiative. Sudarshan Venu, Chairman, TVS Motor Company, Said, “We Applaud The Government for Taking Consistency Steps Towards Towards Logging Growth and EnhanCing The Growing The Growing Middle Class’ PM’s Viksit BHARAT 2047 Industry Especially, it’s a welcome move as it will help 2ws more accessible and also help that that thats looking to upgrade. “

Ajinkya firodia, Vice Chairman of Kinetic India, Expressed Similar Sentiments, but added, “Our only humble request is that that the Electric Vehicle (Ev) Sector Continues to Be Kept in SPECUSIL FOCS. Ensure Higher Penetration of EVS, Especially two-WHEELERS, We Urge The Continuation of Supportive Schemes So that This Transformative Sector does not face any adversity. For India’s sustainable growth and competitiveness. “

On the other hand, speaking for brands with models featuring engines bigger than 350 cc, Diego Grafi, Chairman and MD, Piaggio Vehicles Pvt Ltd, Said, “The revised rates for precedes Reconsidered to ensure that Framework Overall Reflects a clear Intent to Establish Simplicity and Consistency Across Across Categories. ” Nonetheless, he also appreciated the reduction of gst rates on two-wavelers below 350cc. “(IT) will improve accessibility for a wider base of consumers and further support demand growth,” He added.

Beyond Passenger Vehicles, The Farm and Commercial Vehicle Segment has also benefited. GST on Tractor, Tyres, Farm Equipment and Bio-Presticides have dropped to 5 percent, while motor vehicles for Goods Transport and Three-WHEELERS NOHELERS NOW Attract 18 PERCENT Intead of 28 percent. The New GST Rates will be applicable from September 22, 2025.