GST Reforms on Car-Bikes: The central government is planning to reduce tax on small cars and bikes under the new GST Reforms 2025. Let us know what its effect is going to be?
There is good news for car and bike buyers in India. On Independence Day, PM Modi announced the new GST Reforms 2025 and now preparations are underway to implement it by Diwali. The government's aim is to simplify the tax system and provide relief to common customers. The biggest benefit will be to those who want to buy small cars and entry-level bikes.
Will tax on small cars be reduced?
- Till now, 28% GST and 1-3% Cess is levied on small cars. This includes cars having up to 1.2 liter engine and less than 4 meters in length. This is the reason why cars like Alto K10, WagonR, Swift, Baleno, Dzire, Tata Tiago, Tigor, Punch, Hyundai i10, i20 and Exter become expensive. After the new reform, they can be brought in 18% tax slab. This means that all these cars will become much cheaper in the coming time.
Mid-size and large cars also affected
- Mid-size cars and SUVs, which have engines up to 1.5 liters, currently come under around 43% tax due to 28% GST and 15% Cess. According to reports, these too can be brought under the new 40% slab. If this happens, then the prices of popular SUVs like Maruti Brezza, Tata Nexon, Kia Seltos, Sonet and Hyundai Creta will also get relief of up to 3%.
Motorcycle buyers also benefit
- Let us tell you that this reform will bring relief not only for car buyers but also for bike buyers. Currently, 28% GST is levied on bikes up to 350cc, which is planned to be reduced to 18%. After this change, entry-level and commuter bikes like Hero Splendor, Honda Shine, Bajaj Pulsar and TVS Raider will become cheaper. At the same time, premium bikes with engines above 350cc like Royal Enfield 650cc, KTM and Harley Davidson will have higher taxes.
Why is this change necessary?
- In India, the number of two-wheeler buyers is much more than that of cars and most of them buy entry-level bikes. In such a situation, if the government reduces tax on bikes up to 350cc and small cars, then it will directly benefit the customers and the automobile market will also grow
