GST Rate Cuts Accelerate Indian Automobile Industry Growth

The GST Council's recent tax rate reduction for automobiles is poised to inject new momentum into India's automotive sector. Industry leaders have welcomed this timely decision, which benefits first-time buyers and middle-income families by making vehicles more affordable, especially as the festive season approaches.

Industry insiders, including SIAM President Shailesh Chandra, expressed optimism about the simplification of the tax structure and lower rates for mass mobility, which are expected to spur demand significantly. The government is expected to notify mechanisms for utilizing compensation cess on unsold vehicles to ensure a smooth transition.

With a GST reduction to 18% and 40% for specific vehicle categories, experts anticipate this will boost consumption and make personal mobility more accessible. The existing 5% GST rate on electric vehicles supports sustainable mobility, and streamlined processes are set to improve ease of doing business across the sector.

(With inputs from agencies.)