The government may cut GST on cars and bikes from 28 percent to 18 percent by Diwali, reducing prices by 10 percent. Buyers are delaying purchases, awaiting clarity after the September GST Council meeting.
This festive season, small cars and two-wheelers could become cheaper. The central government is planning to reduce the Goods and Services Tax (GST) on cars and bikes from 28 percent to 18 percent.
If the GST cut happens, prices of cars and bikes may drop by around 10 percent. Because of this, many people are putting their purchase on hold and waiting till Diwali. Sales in the auto market have slowed down as buyers hope to save money once GST rates are reduced.
Why Sales Are Slowing Down Now
Tractors: Sales up 32 percent
Two-wheelers & trucks: Sales up 6–7 percent
Passenger cars: Sales up only 1 percent
The weak growth in car sales suggests that people are waiting for the GST cut before buying. A report by global brokerage firm Jefferies also said that if GST is reduced, sales of two-wheelers and small cars will rise quickly.
Decision Expected in Early September
The GST Council is expected to meet on 3–4 September to finalise the new tax rates
– The 28 percent GST slab may be removed for small cars and bikes.
– EVs and tractors may be taxed at just 5 percent GST.
– Luxury cars will continue to attract about 40 percent tax, so no relief for premium buyers.
