Several vehicles will become cheaper before Diwali under GST 2.0. GST will be 18% instead of 28% on petrol and diesel cars, 5% on electric vehicles, and 40% on premium motorcycles. The new rates will be effective from September 22, 2025, providing relief to common buyers and farmers.
GST Reform: The government has reduced taxes on several vehicles by implementing GST 2.0. From September 22, GST will be 18% on petrol cars up to 1200cc and diesel cars up to 1500cc. Electric vehicles will attract 5% GST, and motorcycles up to 350cc will have 18% GST. This move will decrease vehicle prices during Diwali and the festive season, offering financial relief to buyers.
Relief for Small and Compact Cars
The government has decided to apply 18% GST instead of 28% on several petrol, LPG, and CNG cars. The vehicles that will see a tax reduction include cars with engines up to 1200cc and those not exceeding 4 meters in length.
This includes compact SUVs like Nissan Magnite, Fronx, Tata Punch, Hyundai Exter, compact sedans like Maruti Dzire, Honda Amaze, and Hyundai Aura, as well as cars such as Maruti WagonR, Alto, Baleno, Hyundai i10, and Tata Tiago.
Tax Cut on Diesel Vehicles Too
Relief has also been provided for diesel-powered vehicles. Diesel cars with engines up to 1500cc and a length not exceeding 4000mm will attract 18% GST instead of 28%. Additionally, ambulances directly shipped from factories, petrol cars up to 1200cc with a length of less than 4 meters, and diesel hybrid vehicles up to 1500cc will also be taxed at 18 percent. Goods transport vehicles and three-wheeled vehicles have also been included in this slab.
Major Change for Electric Vehicles
Electric and hydrogen vehicles were previously under a 12% GST bracket. This has now been reduced to just 5%. This will lead to a decrease in the prices of electric vehicles, making them more affordable for buyers. Furthermore, tractors up to 1800cc and their parts will also attract a 5 percent GST. Cycles and their parts will also be taxed at 5 percent. Electric two-wheelers were already being taxed at 5%.
Relief for Motorcycles and Scooters
Motorcycles with engines up to 350cc and their parts will attract 18% GST instead of 28%. Motorcycles with a capacity exceeding 350cc have been categorized as premium, and they will directly attract a 40% tax. This change will impact the prices of premium bikes and high-end two-wheelers.
Benefit to Buyers During Festive Season
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