Does Govt Plan to Reduce GST on Small Cars, Will It Give New Momentum to Automobile Sector
GST reform 2025: On the occasion of Independence Day, Prime Minister Narendra Modi made a big announcement regarding GST reform. Under this, the government is now going to reduce the tax on small cars. This decision can bring great relief to both the automobile sector and consumers.
28% GST is levied on cars with less than 1200cc engine
At present, 28 percent GST and 1 percent cess is levied on cars with less than 1200cc engine and smaller than 4 meters. After the proposed reform, the tax on these vehicles will be reduced to 18 percent GST and 1 percent cess. Its direct effect can be seen in the form of reduction in car prices.
Small cars will be more accessible to average consumers
After the reduction in the tax rate, small cars are now more accessible to average consumers. Experts believe that this will significantly benefit first-time car buyers. Additionally, vehicles that are fuel-efficient and affordably priced can be included more quickly in the options available to the middle class.
Move will boost sales
India's automobile industry has been demanding changes in the tax structure for a long time. Industry experts say that this move will boost sales and give companies a strong edge, especially in the small car segment. An expert said, "The reduction in GST rate will create new demand in the market and companies will get an opportunity to increase production."