Boost buoyancy and bolster self-assurance: Automotive industry responds to amended Goods and Services Tax duties

Headline: Automotive Industry Celebrates GST Reforms as Affordable Vehicles and Equipment Become More Accessible

The automotive industry in India is hailing the recent GST reforms as a significant step forward, with the reduction of tax rates making vehicles and equipment more affordable and accessible for drivers, small businesses, and farmers alike.

The GST Council's decision to shift to a streamlined two-tier system of 5% and 18% has been welcomed by industry leaders and manufacturers. Udit Sheth, Vice Chairman of Setco Automotive, and Girish Wagh, Executive Director of Tata Motors, are among those expressing their gratitude for the reduction in GST from 28% to 18% on auto components.

The reduction will not only ease compliance but also bolster key sectors, uplift consumer sentiment, and reduce the financial burden on the common man. Maruti Suzuki, a major player in the Indian automobile market, has expressed its appreciation for small cars being placed in the 18% GST basket.

The simplified two-rate structure will streamline operations and reduce compliance burdens across the industry. Narinder Mittal, President & Managing Director of CNH India, has welcomed the government's decision to reduce GST on farm equipment, related components, and tyres to 5%.

The reduction of GST on new pneumatic tyres from 28% to 18%, and the further relief for tractor tyres and tubes to 5%, is a progressive step that will significantly benefit the industry. The relief extended to smaller vehicles will enhance mobility for the common man by making it more accessible and affordable.

The growth of the car industry in general will also benefit from the GST system. Swapnesh R Maru, Deputy Managing Director of Toyota Kirloskar Motor, and Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles & Tata Passenger Electric Mobility, have both welcomed the GST reforms.

The focus on making electric vehicles (EVs) and their components more affordable will benefit manufacturers, innovators, and consumers alike. The GST Council's decision to retain the 5% GST rate on EVs is a forward-looking move that is expected to boost sales among first-time buyers and middle-income families.

The reduction will significantly accelerate fleet modernisation, driving the adoption of safer, smarter, and greener vehicles across India. The move makes tractors and farm machinery more affordable for farmers, which is expected to accelerate mechanisation and lower overall operating costs.

The government in India, led by Prime Minister Narendra Modi, implemented the GST reforms with the aim of easing compliance, reducing financial burdens, and stimulating demand across the industry. The GST announcement will provide relief to an industry that has been struggling for the last few years.

Extending GST relief and bringing helmets under the 5% slab will lower costs, encourage adoption of certified helmets, and help save thousands of lives annually. Rajeev Kapur, President of Helmet Manufacturers Association, has urged the Government to urgently revisit the GST rate on helmets.

The reduction of GST to 18% across all components will reduce input costs, creating a stronger foundation for innovation, localisation, and long-term competitiveness. Sudarshan Venu, Chairman of TVS Motor Company, has applauded the government for taking consistent steps towards boosting growth and enhancing the growing middle class's spending power.

The reduction of GST from 28% to 18% on tyres will give a tremendous boost to the tyre industry and the mobility ecosystem. Dr. Raghupati Singhania, Chairman & Managing Director of JK Tyre & Industries, has welcomed the GST rate rationalisation.

The reduced rate of 18% for under-350cc motorcycles will cover Classic Legends' 293cc and 334cc Jawa and Yezdi performance classics. Arnab Banerjee, MD & CEO of CEAT Limited, has welcomed the GST Council's decision to rationalise tax rates in the tyre sector.

The GST reforms have also been welcomed by automobile manufacturers such as Hyundai, Renault, Mahindra & Mahindra, and Statiq. Anurag Mehrotra, Managing Director of JSW MG Motor India, Unsoo Kim, Managing Director of Hyundai Motor India, and Anupam Thareja, MD & Co-founder of Classic Legends, have all expressed their appreciation for the landmark GST reforms.

The reduction in GST rates is expected to have a positive impact on the Total Cost of Ownership (TCO) and stimulate demand across the industry. The reduced rate of 18% for small petrol and diesel vehicles and 40% on bigger vehicles ensures affordability and inclusivity for today's diverse customer base.

Shradha Suri Marwah, President of ACMA, has extended their deep gratitude to the Hon'ble Prime Minister and the Hon'ble Finance Minister for this historic reform. Diego Graffi, Chairman and Managing Director of Piaggio Vehicles, and Ravi Mehra, Managing Director of Uno Minda, have also welcomed the GST reforms.

The GST reforms will not only benefit the automotive industry but also the wider economy by boosting consumer spending and encouraging investment in innovation and localisation. The simplified GST system will make many items of daily use more affordable, contributing to greater standardisation and stimulating demand across the industry.