GST Slashed: Small Cars, Bikes Now Cheaper

The automobile industry has benefited greatly from the government’s revision of the GST. The GST Council lowered the tax rate from 28% to 18% for small cars and motorcycles up to 350cc. Please let me know which automobiles will be subject to the tax rate.

The government has lowered the GST on small automobiles and motorcycles up to 350 cc from 28% to 18% in order to help the general public. The revised rates will take effect on September 22, 2025. In addition, taxes on three-wheelers and transportation vehicles have been lowered. According to the auto industry, this move will increase car sales throughout the holiday season. Tell us in detail.

New prices for CNG and gasoline vehicles

Up to 1200 cc, gasoline, gasoline hybrid, LPG, and CNG vehicles will now only be subject to 18% GST. However, only cars under 4 meters in length will be eligible for this exemption. Previously, these were subject to a 28% tax.

Moreover, diesel vehicles up to 1500 cc are less expensive.

Additionally, buyers of diesel and diesel hybrid vehicles will profit. Only 18% GST will now be required for automobiles up to 4 meters in length and diesel cars up to 1500 cc.

Relief for tricycles and bicycles as well

Motorcycles up to 350cc will now only be subject to an 18% tax. These were previously subject to the 28% tax. Since the tax on three-wheelers and transport vehicles has been lowered to 18%, these vehicles will also be less expensive.

What is the current tax rate on large, expensive cars?

Let us inform you that expensive cars and large bikes will now be subject to a 40% GST levy, while small vehicles are now exempt. This category will include motorbikes with a capacity of more than 350 cc, diesel vehicles over 1500 cc, and gasoline vehicles over 1200 cc. The same fee will apply to sports vehicles, helicopters, yachts, and large vehicles like SUVs, MUVs, MPVs, and XUVs. But now, there will also be a reduction in the overall tax on expensive cars. At the moment, they were subject to a 50% tax, which included 28% GST and 22% cess. Only 40% GST will be charged under the new system, and there won’t be any cess.

Customers and the auto industry gain

Due to new technology, strict regulations, and safety standards, car prices have been rising for the past few years. For a long time, two-wheeler industries also demanded a reduction in GST. It is currently anticipated that sales of small automobiles and motorcycles would rise as a result of this government move.

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