GST Reforms, Reduces Tax On Two-Wheelers And Small Cars To 18 pc

In a landmark move towards simplifying the tax structure and easing the financial burden on citizens, Prime Minister Narendra Modi, in his Independence Day address this year, announced the next-generation GST reforms. The new tax rates will be implemented from Monday. Today, we will take a look at the potential impact of these reforms on the automobile industry. 

In a big relief for the common man, the GST Council has announced a major cut in tax rates on two-wheelers and small cars. Under the next generation GST reforms, the government has reduced the GST rates on two-wheelers from 28 per cent to 18 per cent up to 350cc.



The reduction in GST will bring relief to lower-middle-class families, young professionals and gig workers who depend on affordable transport for their livelihood and daily needs.

Meanwhile, the GST on small cars has also been slashed down to 18 per cent, which previously was part of the 28 per cent slab. This move is expected to make cars more affordable for middle-class families, thereby boosting the auto sector. By lowering the GST, the move will also support job creation in manufacturing, sales, services and financing, which will reinforce the nation’s growth momentum. The new tax rates will come into effect from Monday.