GST 2.0’s April 2025 reforms trimmed tax slabs on cars and two-wheelers—down to 18–26% for most models—delivering savings of ₹1,500 on scooters up to ₹2.5 lakh on luxury SUVs. Buyers, dealers, financiers, and policy watchers must update price lists, EMI calculators, and customer advisories to reflect lower ex-showroom costs.
1. What Is GST 2.0 for Vehicles?
The 56th GST Council (April 2025) rationalized vehicle tax slabs:
- Entry-level scooters & hatchbacks: 18%→17%
- Mid-segment sedans & bikes: 28%→26%
- Luxury cars/SUVs & superbikes: GST unchanged or modestly increased to 40% with cess abolished, trimming the total levy by 1.5–3%.
Objective: Boost consumer sentiment, ease inflationary pressure on auto sales.
2. Price Impact by Segment
| Vehicle Type | Old GST + Cess | New GST + Cess | Approx. Price Drop |
|---|---|---|---|
| Entry-level scooters | 18% + 0% | 17% + 0% | ₹1,500–₹2,000 |
| Budget hatchbacks (<₹8L) | 28% + 0–1% | 18% + 0% | ₹15,000–₹20,000 |
| Mid-range sedans (₹8–15L) | 28% + 0–15% | 26% + 0% | ₹40,000–₹60,000 |
| Compact SUVs (₹10–20L) | 28% + 15–22% | 40% + 0% | ₹50,000–₹75,000 |
| Luxury cars & SUVs (>₹20L) | 28% + 20–22% | 40% + 0% | ₹1.5 L–₹2.5 L |
| Superbikes (>₹5L) | 28% + 3–22% | 40% + 0% | ₹30,000–₹50,000 |
Based on manufacturer MRP; model-specific figures may vary.
3. Who Stands to Gain Most?
Budget & Mid-Range Buyers unlock up to ₹60,000 savings on sedans.
Luxury Segment enjoys six-figure reductions on SUVs and performance cars.
Two-Wheeler Buyers (students, commuters): ₹1,500–₹2,000 off entry-level scooters.
Dealers & Showrooms: Revise price lists, train sales teams on new slabs, and promote “Save up to ₹75,000 on SUVs!”
Finance & Loan Seekers: Lower principal reduces EMIs—re-negotiate loan terms or top-up existing loans.
Middle-Class Families: Micro-savings boost household budgets.
Policy Watchers & Investors: Auto stocks may rally on volume upticks.
4. How to Calculate Your Savings
- Determine ex-showroom price (pre-GST).
- Compute old vs new tax:
- Old tax = price × (old rate)
- New tax = price × (new rate)
- Savings = old tax – new tax.
- Registration & insurance remain unchanged.
Example: ₹10 lakh sedan
- Old tax: ₹10 L × 28% = ₹2.8 L
- New tax: ₹10 L × 26% = ₹2.6 L
- Savings: ₹20,000
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