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GST 2.0: Planning To Buy A Car Or Bike? All You Need To Know About Tax Rate Changes On Vehicles
GST 2.0: Planning To Buy A Car Or Bike? All You Need To Know About Tax Rate Changes On Vehicles
GST On Cars And Bikes: If you're planning to buy a new car, bike or even a tractor, the 56th GST Council meeting has just brought some good news for small cars and motorcycles. The government has slashed taxes on smaller vehicles from 28% to 18%. However, the GST rates have been sharply increased for luxury cars, SUVs and high-end motorbikes from 28% to 40%.
The new GST rates will be effective from September 22, 2025, the first day of Navratri.
It means those planning to buy luxury cars or premium bikes, the prices are set to increase soon. However, small cars and affordable bikes will get cheaper after September 22, 2025.
Also See: New GST Rates List Live Updates
Cars: Small Gets Cheaper, Big Gets Costlier
Petrol, CNG and LPG cars with engine capacity up to 1200cc and length up to 4000 mm will now attract 18% GST, lower from the earlier 28%. Diesel cars with engine capacity up to 1500cc and length up to 4000 mm also get the lower 18% GST rate.
It means that popular hatchbacks and compact sedans, including Maruti Swift, Hyundai i20, Tata Altroz, and Honda Amaze, might become more affordable.
Large Cars & SUVs Get Costlier
Cars with engine capacity above 1200cc (petrol/CNG/LPG) or above 1500cc (diesel) or length more than 4000 mm will now attract a hefty 40% GST, as compared with 28% earlier.
It covers bigger sedans, premium SUVs, and imported models. Customers looking at vehicles like Toyota Fortuner, Mahindra XUV700 (higher variants), or imported luxury sedans will face higher costs.
Bikes: Affordable Motorcycles To Get Cheaper, Premium Bikes To Be Costlier
Motorcycles up to 350cc engine capacity (including mopeds and scooters with auxiliary motors) will now attract 18% GST, down from 28%.
This covers most mass-market motorcycles and scooters, making them cheaper for everyday riders.
Also See: GST On Health Insurance | New GST Rates
Motorcycles Above 350cc To Get Costlier
Motorcycles above 350cc, including Royal Enfield 650cc, Harley-Davidson, or premium KTM models, will now attract 40% GST. So, premium bike enthusiasts will have to shell out more.
Tractors & Rural Vehicles
Tractors (except very high engine capacity road tractors), along with tractor parts like tyres, brakes, radiators and clutches, now attract just 5% GST. This is a major relief for farmers and rural buyers.
Three-wheelers (autos) also see GST reduced to 18%.
Commercial Vehicles & EVs
Goods transport vehicles (trucks, chassis for lorries, etc.) now come under 18% GST instead of 28%, lowering costs for logistics and fleet operators.
Electric Vehicles: No Change In Rates
GST on electric vehicles remains the same at 5%. So, Ather, Ola Electric, TVS electric vehicle prices will remain the same. Earlier, there were reports that GST on such vehicles would be hiked to 18%, which have been junked now.
Hybrids:
Small hybrids (up to 1200cc petrol, 1500cc diesel, under 4000 mm) will attract 18% GST, larger hybrids (bigger engine or longer than 4000 mm) will attract 40% GST.
However, fuel-cell vehicles (including hydrogen cars) will attract a 5% GST, indicating the government's push towards clean mobility.
No Compensation Cess
Unlike earlier when bigger cars and SUVs attracted an additional compensation cess (on top of GST), the Council has decided to simplify the structure. Now, the 40% GST rate itself is comprehensive, and no separate cess will be added.
GST Rate Changes: What It Means For You?
If you are planning to buy a hatchback, compact SUV, entry-level sedan, or two-wheeler under 350cc; prices are set to drop once companies pass on the benefit.
Swipe Left For Next Video
However, if you are planning to buy a luxury car, premium SUV, imported sedan, or a big superbike; there will be a hike on prices, maybe after September 22, with 40% GST. So, this is your last time to buy premium bikes and cars at 28% rate, before it increases to 40%.
Middle ground for commercial buyers and logistics operators. Lower taxes on trucks and CVs could cut transport costs over time.
Source: News18
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