Landmark GST Reform Spurs Growth in Auto Industry

The auto industry has enthusiastically welcomed the GST Council's decision to overhaul tax rates, calling it a landmark reform poised to enhance affordability and stimulate demand. The initiative is expected to accelerate India's shift towards sustainable mobility, as echoed by leading industry figures who hailed its potential benefits for both consumers and businesses.

Anish Shah, the Group CEO & MD of Mahindra Group, commended the reform, describing it as a 'defining moment' in India's journey towards a simplified, inclusive tax system. By streamlining tax rates and emphasizing essentials vital to daily life, the government reinforces its commitment to improving both Ease of Living and Ease of Doing Business. This reform is not only set to provide immediate relief to households but also to fortify key sectors such as automobiles, agriculture, healthcare, renewable energy, and MSMEs.

The Society of Indian Automobile Manufacturers (SIAM) supports the reduction of GST on vehicles to 18% and 40%, a significant drop from previous rates of 28% to 31% and 43% to 50%. SIAM President Shailesh Chandra noted this reduction would benefit first-time buyers and inject new momentum into the industry. He emphasized the importance of affordability for the entry-level segment and extended gratitude to the government for maintaining a 5% GST rate on electric vehicles, supporting the ongoing push towards sustainable mobility.

(With inputs from agencies.)