Auto sector welcomes GST rationalization as industry leaders hail reforms
03 Sep 2025 | 10066 Views | By Autocar Professional Bureau
The following are the reactions of key auto industry stakeholders, such as manufacturers, associations, analysts and others, to the government's move to cut GST on several categories of automobiles and components:
Venkatram Mamillapalle, Managing Director, Renault India:
“We welcome the GST Council’s decision to rationalize rates into a ...
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The following are the reactions of key auto industry stakeholders, such as manufacturers, associations, analysts and others, to the government's move to cut GST on several categories of automobiles and components:
Venkatram Mamillapalle, Managing Director, Renault India:
“We welcome the GST Council’s decision to rationalize rates into a two-slab structure of 5% and 18%, a landmark reform for the Indian economy. For the automobile sector, the move is transformative. The GST reduction on the entry level car segment (petrol below 1200 cc and diesel below 1500 cc) from 28% to 18%, and a uniform rate for auto components at 18%, make personal mobility significantly more affordable for the masses. The rationalized GST will ease household expenses, fuel consumption, and create a multiplier effect on long-term economic growth. With reduced taxes on tractors, agri-inputs and farm equipment, the GST reform will boost rural demand, strengthen agri-linked enterprises, and create new growth avenues in semi-urban and rural India."
Unsoo Kim Managing Director, Hyundai Motor India:
“We at Hyundai Motor India Limited (HMIL) welcome the landmark GST reforms announced by the Government of India. This revolutionary step will provide a strong impetus to the Indian economy, enhance buoyancy and further strengthen consumer confidence. By reducing the tax burden on essential goods, the Government has laid the foundation for inclusive growth and a robust, consumption-led economy. The GST overhaul will directly benefit the automotive sector. The announced reforms align seamlessly with the Government's commitment to Viksit Bharat and the Make in India initiative, encouraging domestic manufacturing and boosting demand across both urban and rural markets. Notably, 60% of our ICE portfolio will now fall under the 18% slab rate, with the remainder at 40%.”
Vinod Aggarwal, Vice Chairman EML and Managing Director & CEO of VE Commercial Vehicles:
“The GST reform announced yesterday is a very positive and pro-growth move that will immediately lift consumer sentiment and boost demand across a broad range of sectors. It truly a festive gift from the government to the nation and the automotive industry. We wholeheartedly applaud the Finance Minister and the GST Council for reducing GST on commercial vehicles—buses and trucks—from 28% to 18%. This will not only reduce logistics costs for the economy, but encourage customers to upgrade their fleets with modern, fuel efficient and safer trucks and buses. For buses, this will encourage much-needed fleet modernisation by state transport corporations and private operators, strengthening public mobility. For trucks, it will ease cost pressures for fleet operators and stimulate demand in logistics and freight, which are critical for India’s growth momentum. Together with the reduction in GST on auto components, the GST reforms reinforce the government’s commitment to enabling sustainable growth of the auto sector.”
Jitin Makkar, Senior Vice President and Group Head, Corporate Sector Ratings, ICRA Limited:
“The GST rate cut is a welcome relief for the automobile sector, which has been grappling with sluggish demand (from both domestic and exports) and inventory build-up pressures. Lower tax incidence directly translates into reduced on-road prices, making vehicles more affordable for consumers. This is particularly significant for entry-level cars and two-wheelers, where price sensitivity is high. The move is expected to revive showroom footfalls, accelerate retail sales, and help OEMs clear existing stock. Additionally, it would have a positive spillover effect on ancillary industries such as auto components and financing. The organised auto aftermarket segment, comprising spare parts, components, batteries, tyres, lubricants, repairs etc., will also benefit as the pricing differential with the unorganised segment narrows."
Sudarshan Venu, Chairman, TVS Motor Company:
"We applaud the government for taking consistent steps towards boosting growth and enhancing the growing middle class’s spending power - all towards realising PM’s vision of Viksit Bharat 2047. The GST tax cuts is a major move by the government to further turbocharge growth. It will significantly boost consumption across segments of the society. For our industry especially, it’s a welcome move as it will help 2Ws become more accessible and also help those looking to upgrade."
Ajinkya Firodia, Vice Chairman of Kinetic India:
“ We welcome this very positive and timely move by the Government. The GST rate cut will give a strong boost to the economy in an unprecedented manner. Essentials, including food, automobiles, and several other key sectors, have been rightly covered under this decision. "
" This step aligns with the vision of making India self-sufficient—an Atmanirbhar Bharat. It will lower interest rates, facilitate employment generation, and encourage capacity augmentation across industries. "
" Our only humble request is that the electric vehicle (EV) sector continues to be kept in special focus. To ensure higher penetration of EVs, especially two-wheelers, we urge the continuation of supportive schemes so that this transformative sector does not face any adverse impact. EV adoption is critical for India’s sustainable growth and competitiveness "
Shradha Suri Marwah, President, ACMA:
“On behalf of the auto component industry, I extend our deep gratitude to the Hon’ble Prime Minister, Shri Narendra Modi, and the Hon’ble Finance Minister, Smt. Nirmala Sitharaman, for this historic reform. The rationalisation of GST to a uniform 18% across all auto components has been a long-standing recommendation of ACMA. This decisive step will curb the grey market, encourage the use of quality compliant components, ease compliance, and support MSMEs - thereby strengthening the global competitiveness and resilience of India’s USD 80.2 billion auto component industry.”
She added, “We also welcome the GST Council’s approval for faster export refund claims through ICEGATE for smaller exporters, which will help clear pending shipping bills and significantly ease liquidity constraints.”
C S Vigneshwar, President, FADA:
"The 56th GST Council meeting marks a watershed moment for India’s automobile retail industry. FADA warmly welcomes the bold and progressive reforms which simplify the tax structure, lower rates for mass mobility, and bring consensus across all States. This is a decisive step that will boost affordability, spur demand, and make India’s mobility ecosystem stronger and more inclusive.
We thank the Hon’ble Prime Minister, Finance Minister, and the GST Council for taking such a courageous decision with unanimity. As the country heads into the peak festive season, glitch-free and implementation will be the key to ensuring that the benefits seamlessly reach customers. One area that may needs earliest clarification is about levy and treatment of cess balances currently lying in dealers’ books, so that there is no ambiguity during transition.
FADA remains committed to working closely with the Government and GST Council to make GST 2.0 a model reform — simple, transparent and growth-oriented for both industry and consumers."
Shailesh Chandra, President, SIAM:
“Automobile Industry welcomes the Government’s decision to reduce the GST on vehicles to 18% and 40%, from earlier rates of 28% to 31% and 43% to 50%, respectively, especially in this festive season.
This timely move is set to bring renewed cheer to consumers and inject fresh momentum into the Indian Automotive sector. Making vehicles more affordable, particularly in the entry-level segment; these announcements will significantly benefit first-time buyers and middle-income families, enabling broader access to personal mobility.
We also thank the Government of India for continuing with GST rate of 5% on Electric Vehicles, which will help sustain the ongoing momentum towards sustainable mobility.
Furthermore, the resolution of classification interpretations and the correction of the inverted duty structure will greatly streamline business processes across the automotive industry, supporting ease of doing business.
We are confident that the Government will also soon notify suitable mechanisms for the utilisation of compensation cess on unsold vehicles, ensuring a smooth and effective transition.”
Saurabh Agarwal, Partner & Automotive Tax Leader, EY:
"The rationalization of GST rates on automotive vehicles and parts is a truly welcome and significant development. By making vehicles more affordable across all segments, this move will not only boost consumer spending but also simplify complex classification disputes that have long burdened the industry. The discontinuance of the cess is a particularly pragmatic step, which will provide much-needed support to a sector that is a vital contributor to our nation's GDP.
While this change is broadly positive, the automotive industry must now carefully reassess the financial impact of state incentives and subsidies, which are often linked to GST rates. This may necessitate a renegotiation with state governments to address potential changes in costs and clawback periods.
I am also encouraged by the pragmatic stance on anti-profiteering. A competitive market like ours naturally ensures that the benefits of tax cuts are passed on to consumers. Avoiding excessive administrative burdens will allow these crucial reforms to take root smoothly, without hindering the very progress they are designed to achieve. We are highly optimistic about this new chapter for the automotive sector under the GST framework."
Dr. Anish Shah Group CEO & MD, Mahindra Group:
“The next-generation GST reforms announced today mark a defining moment in India’s journey towards building a simpler, fairer, and more inclusive tax system. By moving to a streamlined two-rate structure and focusing on essentials that touch the lives of every citizen- from food, health, and insurance to agriculture and small businesses -the Government has reaffirmed its commitment to Ease of Living and Ease of Doing Business. The rationalisation measures will not only provide immediate relief to households but also strengthen key sectors such as automobiles, agriculture, healthcare, renewable energy, and MSMEs - all of which are vital to job creation and sustainable growth. The correction of long-pending inverted duty structures in critical industries is welcome.
At Mahindra, we view these reforms as transformative. They simplify compliance, expand affordability, and energise consumption, while enabling industry to invest with greater confidence. This bold step is in line with the vision articulated by the Hon’ble Prime Minister of building a citizen-centric, future-ready Bharat. It strengthens India’s economic foundations and will help drive the next phase of equitable and inclusive growth- journey towards Viksit Bharat @2047.”
Gaurav Vangaal, Associate Director for Light Vehicle Production Forecast at S&P Global Mobility:
"The GST reduction on small cars to 18% is a strategic boost for India’s auto sector, especially as festive demand builds from Navratri through Diwali. Beyond reviving the entry-level passenger vehicle segment, this move unlocks real potential for affordable innovation in the sub-4 meter category. With lower acquisition costs, Indian consumers can now access feature-rich, compact vehicles without a premium price tag. We expect Maruti, Tata, and Mahindra to lead this shift, especially with popular small crossovers like Fronx and Punch poised to gain significant traction,"
Rajesh Jejurikar, ED & CEO -Auto and Farm Sector, M&M:
“We applaud the Government for this landmark GST rationalisation, which will have a far-reaching positive impact across the automotive and farming sectors . The move makes tractors and farm machinery more affordable for farmers, reduces costs for commercial vehicles and improves accessibility for personal mobility through rationalisation of rates across all SUVs. Together, these measures are expected to stimulate demand, and drive inclusive growth across the entire ecosystem.
We also appreciate the continuation of the 5% GST rate on EVs, which is a critical enabler of India’s clean mobility vision. This measure will further accelerate the adoption of electric vehicles and reinforce India’s leadership in sustainable, green transportation.”
Girish Wagh, Executive Director, Tata Motors:
“Guided by the visionary leadership of the Hon’ble Prime Minister and the Hon’ble Finance Minister, the GST Council’s progressive decision to reduce the GST rate on Commercial Vehicles — trucks, buses, and ambulances — to 18% marks a pivotal reform in India’s mobility landscape. This landmark reform will significantly accelerate fleet modernization, driving the adoption of safer, smarter, and greener vehicles across India. By resolving the long-standing issue of inverted duty for transporters, it unlocks greater affordability and liquidity, strengthening the entire commercial mobility ecosystem. Further, the reduction in GST on hydrogen fuel cells to 5% is a forward-looking move that reinforces India’s commitment to clean energy and zero-emission mobility. This timely intervention is a catalyst for sustainable growth in logistics and public transport, a boost to economic momentum, and a powerful enabler in India’s journey of inclusive growth and nation building.”
Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles & Tata Passenger Electric Mobility:
“These reforms reflect Prime Minister Narendra Modi’s vision for next-generation GST that prioritizes both ease of living and ease of doing business. The streamlined GST framework goes beyond rate rationalization with structural reforms enhancing long-term confidence in India’s economic environment.
The GST Council’s decision to retain the 5% GST rate on electric vehicles is a forward-looking move that reinforces India’s commitment to sustainable, zero-emission mobility and signals long term policy stability. The reduction of GST on small cars to 18% further expands access to personal mobility, making it more affordable for a broader section of society. Together, these measures will not only accelerate EV adoption but also drive innovation, strengthen domestic manufacturing, and propel India toward a cleaner, smarter, and self-reliant mobility future.”
Narinder Mittal, President & Managing Director, CNH India:
“We welcome the government’s decision to reduce GST on farm equipment, related components and tyres to 5%. These GST reforms will accelerate mechanization by making tractors, harvesters, balers and implements more affordable, while lowering overall operating costs for farmers. This empowers industry players to address labour shortages, enhance farmer’s productivity, and promote sustainable practices. For CNH, it provides the right environment to further localize, innovate, and expand our offerings, strengthening India’s role as a global CNH hub for farm machinery. As a leader in the harvesting and post harvesting segment, we see this reform as particularly timely ahead of the harvesting season, as lower costs will enable more farmers to adopt baling solutions, reducing crop residue burning and its impact on the environment.”
Udit Sheth, Vice Chairman, Setco Automotive Limited:
“The reduction in GST from 28% to 18% on auto components is a welcome step that will provide much-needed relief to both the auto industry and consumers and have a great impact of Total Cost of Ownership.
For us at Setco, it will not only ease cost pressures but also stimulate demand, creating a positive ripple effect across the entire supply chain. We see this move as a catalyst for growth in the commercial vehicle sector, and we are optimistic about the momentum it can generate for the broader economy.”
Dr. Sudhir Mehta, Founder & Chairman – EKA Mobility; Chairman & Managing Director – Pinnacle Industries; Advisor – Nation First Policy Research Centre; Past President – MCCIA:
“We appreciate the government’s forward-looking GST reforms, which will provide a strong impetus to India’s mobility and manufacturing sectors.The decision to reduce GST on auto components from 28% to 18% is a particularly welcome step, as it will ease cost pressures on the automotive supply chain, enhance efficiencies, and provide much-needed relief to manufacturers and OEMs.. This move will particularly support critical segments such as ambulances and specialised vehicles, ensuring greater accessibility and affordability of essential transport solutions. At the same time, the reforms will accelerate the adoption of electric commercial vehicles, driving India’s transition towards sustainable, efficient, and self-reliant mobility. The Super Tax Rationalisation Exercise, too, is a positive signal reflecting a broader momentum that can pave the way for sustained high growth. Overall, this rationalisation reinforces confidence, stimulates innovation, and positions India strongly on the path to becoming a global hub for future-ready transportation."
Nagendra Nath Sinha, MD, Rodic Digital & Advisory:
"The recent reduction of GST on critical construction materials such as cement and steel from 28% to 18% is a game-changer for India’s infrastructure sectors. With cement and steel forming nearly 40–45% of project costs, this change will cut material tax burden by about 10% and help in saving nearly ₹10 lakh on every ₹1 crore spent. Such savings will make projects more viable, accelerate execution, and boost participation in Public-Private Partnerships. The real estate sector, especially affordable housing, will also benefit as developers pass on cost efficiencies to consumers. Equally important, reduced tax pressure will limit the incentive for informal procurement, strengthening transparency and compliance. Faster refund decisions would also benefit the industry due to improved cash flow and lower interest liability. Furthermore, with simplified tax structures, we can better track investments and reduce reliance on informal procurement channels, enhancing transparency across the sector. We believe this landmark step will accelerate the nation’s infrastructure growth, catalyse real estate momentum, and set new benchmarks for transparency and efficiency. "*.
Sorab Agarwal, Executive Director at ACE:
"The GST Council’s decision to revise tax rates is a progressive move for the economy at large. For the construction and infrastructure space, the reduction in GST on key building materials is expected to significantly ease input costs, accelerate project execution, and provide much-needed momentum to the sector. This will not only improve affordability for end-users but also stimulate investments and create stronger linkages across allied industries.
Separately, the reduction of GST on agricultural equipment from 12% to 5% is a landmark decision that will directly benefit farmers and the rural economy. At ACE, we believe that this move encourages us to focus more on the sector mechanisation and enable higher productivity in agriculture. It is well aligned with the government’s vision of doubling farmers’ income and fostering rural prosperity.
Together, these measures will unlock growth across urban and rural sectors, boost economic activity, and strengthen India’s journey towards becoming a more resilient and inclusive economy."
Subhashendra Kumar, CFO, Trehan Iris:
"We welcome the move towards a simplified two-slab GST structure of 5% and 18%, which marks a progressive step for the sector. The rationalisation of taxation is expected to lower overall project costs, enabling developers to offer more competitive pricing to homebuyers. At the same time, it will bring greater transparency and streamline compliance, thereby improving operational efficiency. Such policy clarity is likely to reinforce buyer confidence, stimulate demand across the housing market, and lay the foundation for sustained long-term growth for both homebuyers and the real estate industry.”
Anuj Thakar, Senior Vice President, India & SAARC, Yokohama-ATG:
"The cut in GST from 18% to 5% on tractor tires and tubes, and 28% to 18% on new pneumatic tires is a historic reform that will directly benefit the farmers and off-highway tire customers in India. As makers of Alliance and Primex Tires, we see this GST reduction as an opportunity to assist our consumers in choosing the right application-specific mobility solutions at lower operating costs."
Kuldip Singh Rathee, Chairman and Managing Director, ASK Automotive:
“We welcome the GST announcement by the Ministry of Finance, which is indeed a pre-festival gift for the entire nation. The next-generation two-slab tax structure marks a landmark reform for the Indian economy and will help ease the lives of the common man. We particularly appreciate the measures taken for the automobile sector, especially for small cars and two-wheelers up to the 350cc segment. This will provide much-needed relief to an industry that has been struggling for the last few years. The reduction of GST on entry-level vehicles from 28% to 18%, along with the retention of 5% GST on electric vehicles, will boost sales among first-time buyers and middle-income families, while also promoting new opportunities for personal mobility and last-mile connectivity. Moreover, the uniform 18% rate on auto components will strengthen the entire ecosystem by reducing ownership costs and improving supply chain efficiency. We are confident that this festive season will set new benchmarks for the Indian automobile sector.”
Ravi Mehra, Managing Director, Uno Minda:
"We welcome the GST reforms announced yesterday, particularly the reduction of rates on automobiles and auto components from 28% to 18%. This landmark decision will make vehicles more affordable, boost consumer sentiment, and strengthen India's automotive sector globally. The simplified two-rate structure will streamline operations and reduce compliance burdens across the industry. At Uno Minda, this reform provides us with a strong impetus to innovate, invest in new technologies, and deepen our collaborations with OEMs. We believe these changes will accelerate technology adoption, expand manufacturing capacities, and create new opportunities throughout the automotive value chain. We commend the government for this forward-thinking approach that balances fiscal prudence with economic growth, and propels India's rise as a global manufacturing hub."
Balfour Manuel, Managing Director at Blue Dart:
“The GST Council’s decision to rationalize tax slabs is a timely and progressive step for India’s consumption-driven economy. By easing tax rates on freight services, with multimodal transport within India now at 5% (down from 12%) and road haulage rentals also reduced to 5%, the move will directly lower logistics costs and simplify compliance. We anticipate stronger household demand across FMCG, durables, and automobiles, and naturally, this momentum will drive higher shipment volumes across our networks, particularly as we approach the festive season.
At Blue Dart, we welcome this reform as it allows us to streamline logistics planning, reduce operating costs for customers, and strengthen the ecosystem for growth. Furthermore, we see this as an opportunity to enhance our role as the logistics partner of choice, delivering greater value while continuing to innovate for the future of India’s logistics industry.”
Santosh Iyer, Managing Director & CEO, Mercedes-Benz India:
“Government listened to the automotive industry’s long standing wish list of rationalizing GST rates. This GST revision is the step in right direction, is progressive and will induce the much-needed impetus by boosting consumption and bring momentum to the automotive industry which essentially remains the pulse of the Indian economy. We are thankful to the Government for keeping the GST rate for BEVs unchanged, ensuring faster transition to a decarbonized future.”
Udit Sheth - Vice Chairman, Setco Automotive:
“The reduction in GST from 28% to 18% on auto components is a welcome step that will provide much-needed relief to both the auto industry and consumers and have a great impact of Total Cost of Ownership.
For us at Setco, it will not only ease cost pressures but also stimulate demand, creating a positive ripple effect across the entire supply chain. We see this move as a catalyst for growth in the commercial vehicle sector, and we are optimistic about the momentum it can generate for the broader economy.”
Deepak Jain, Chairman, Lumax Group
"We welcome the Government’s decision on GST reforms and rationalisation. By lowering GST to 18% across all components, will reduce input costs, creating a stronger foundation for innovation, localisation, and long-term competitiveness. Importantly, consumers will benefit from more affordable vehicles and reliable spare parts in the aftermarket, improving both safety and ownership experience. The reforms, well timed, will also bring optimism ahead of the festive season, with demand expected to rise across entry-level passenger vehicles and two-wheelers.”
Anurag Mehrotra, Managing Director, JSW MG Motor India
"We at JSW MG Motor India welcome the GST rationalisation announced by the government. It is indeed a landmark reform and comes at a momentous time for mobility, consumers and industry. It is an overdue reform that will significantly bring down the household expenses, addresses the unaffordability of new cars for millions and boost the economic growth in the long run. The reduction to 18% for small petrol and diesel vehicles and 40% on bigger vehicles ensures affordability and inclusivity for today’s diverse customer base. In addition, the government’s decision to maintain a 5% GST on EVs signals a vital push toward sustainable, future-ready transportation. Our diverse portfolio equips us to lead this transformation, delivering unparalleled value, driving adoption, and accelerating India’s evolution to a cleaner, smarter, and more inclusive mobility ecosystem."
Diego Graffi, Chairman and Managing Director, Piaggio Vehicles:
“The reduction of GST on three-wheelers from 28 to 18 percent is a landmark decision for an industry that contributes 5 to 7 percent of India’s automotive market and continues to serve as the backbone of last-mile transportation. The lower tax rate will make vehicles more affordable and ownership more accessible for drivers and small businesses, thereby enhancing connectivity across both urban and rural markets. The reform is also particularly timely for electric three-wheelers, as it will sustain adoption momentum and drive economic activity even in the absence of subsidies. We believe this step will serve as a catalyst for the next phase of expansion and formalisation of the industry.”
Dr. Raghupati Singhania, Chairman & Managing Director, JK Tyre & Industries:
“The GST rate rationalisation marks a pivotal moment in India’s consumption-led growth journey. By reducing levies on essential goods, the government has somewhere eased consumer burden while catalysing fresh demand across sectors. With affordability rising and compliance simplified, it is expected to trigger a demand surge that reinforces India’s position as the world’s fastest-growing major economy.
With regards to tyres reduction of GST from 28% to 18%, and on farm tyres to 5%, is a landmark reform that will give a tremendous boost to the tyre industry and the mobility ecosystem. Tyres are an essential part of everyday life, and this progressive step will benefit both consumers and manufacturers alike. For fleet operators and farmers, lower GST translates into reduced input costs and improved operating efficiency, thereby strengthening demand in these vital segments. Combined with our continued focus on innovation and premiumization, this reform empowers us at JK Tyre to serve customers more effectively and contribute to sustained industry growth.”
R C Bhargava, Chairman, Maruti Suzuki India Limited:
“Maruti Suzuki congratulates and thanks the Prime Minister, Finance Minister and the GST council for the decisions taken to restructure the GST system. This is a major reform that will give a boost to the entire economy and take the country closer to its goal of a Viksit Bharat.
This reform is another step that would empower the people to shape their future themselves. The last budget put a substantial amount of money into their pockets. Borrowing rates have come down due to inflation control and financial prudence. The new GST system will make many items of daily use more affordable. The people will have more purchasing power and that would stimulate more demand and production. The speed of decision making and implementation is also admirable.
The automotive industry would be a direct beneficiary of faster economic development. In particular, Maruti Suzuki is grateful for small cars being placed in the 18% GST basket. The 10% lower tax will stimulate a flagging market, and many more people will be able to buy safer and more comfortable means of mobility. The growth of the car industry in general will also benefit from the GST system and we expect the industry growth rate to come back to about 7% a year. Manufacturing growth and employment will both benefit.”
Anupam Thareja, MD & Co-founder, Classic Legends:
“The government’s bold and timely GST reforms will bring a tectonic shift for the greater good, echoing the historic transition from 2-stroke to 4-stroke engines. Classic Legends welcomes the GST rationalisation, especially the reduced rate of 18% for under-350cc motorcycles, which covers our 293cc and 334cc Jawa and Yezdi performance classics.
While it raises the tax burden for higher cc motorcycles such as our 652cc BSA Gold Star, we accept it as the hallmark of progressive taxation. The trade-off makes mid-segment bikes accessible to a larger rider community -- a win for India’s motorcycling culture. We thank the Hon’ble Finance Minister for the fresh impetus for demand that will energise the economy amid a slowdown and global tariff wars.
Decades ago, our brands faded due to a policy shift; today, policy foresight is helping restore their legendary stature. We will pass on 100% of the GST benefit to our customers. Coinciding with the festive season, we are telling young Indians who aspire to own a true iconic performance motorcycle: Your time is now.”
Shailesh Saraph, EVP and Global Head – ER&D Delivery, Tata Technologies:
“The move to reduce GST for automotive sector would help in boosting consumer demand, make mobility more accessible, and strengthen India’s position as a global automotive hub. This comes at a crucial time when the industry is rapidly transitioning to electric and sustainable mobility, which will also encourage greater investments in innovation and capacity building. For the sector, this as an opportunity to strengthen partnerships with Original Equipment Manufacturers (OEMs) and suppliers, delivering advanced engineering and digital solutions to drive growth and transformation in the sector.”
Ashish Suman, Partner, JSA Advocates & Solicitors:
"An eye-catching decision, which has been taken as part of the GST rationalisation and simplification exercise by the government, is the reduction of GST on hydrogen vehicles based on fuel cell technology from 12% to 5%. This is in line with the government’s intent to focus on growing the market for hydrogen powered vehicles as per the aims of the National Green Hydrogen Mission.
Keeping the clean transportation in focus, the GST rate on EVs has been kept steady at 5% i.e., the same as hydrogen powered vehicles, while the GST rates for smaller hybrid vehicles has been slashed to 18% from 28%. This once again demonstrates the government’s inclination towards a multi-pronged approach of ensuring growth of several technologies when it comes to decarbonising the automotive sector."