Before the Diwali festival, the middle class will benefit from a range of vehicle price reductions due to changes in the Goods and Services Tax (GST). These adjustments directly impact the cost of purchasing and maintaining vehicles, offering significant savings for consumers. The government has lowered the GST on numerous vehicles and auto parts from 28% to 18%, with the changes taking effect on September 22nd.
One of the key areas of relief is the reduction in GST on tires. New rubber pneumatic tires, with the exception of those used on bicycles, rickshaws, and aircraft, will now have an 18% GST rate. This adjustment will reduce maintenance expenses for these vehicles. In addition, vehicles used for carrying goods will also have their GST reduced to 18%, providing further cost savings. Buses, trucks, and ambulances also benefit from this tax relief.
Road tractors designed to pull semi-trailers, with engine capacities exceeding 1800cc, will now be taxed at 18%. This is expected to ease costs for the logistics and transportation industries.
For families, smaller-engine vehicles are set to become more affordable. Petrol, CNG, and LPG-powered cars with engines up to 1200cc and a length of 4 meters or less will experience a price decrease. Diesel cars with engines up to 1500cc and a length under 4 meters will also be included in the lower GST slab. This means that hatchbacks and compact cars will now be subject to an 18% tax rate instead of the previous 28%.
Three-wheeler vehicles and motorcycles (with engines up to 350cc, including scooters and mopeds) will become more affordable, benefiting families in smaller cities and towns.
Ambulances, equipped with essential medical fittings from the factory, are also part of the tax relief. This could positively impact the healthcare sector, potentially resulting in more accessible ambulance services. Hybrid vehicles (those powered by both petrol/diesel and electric motors) are now also included, potentially leading to more affordable eco-friendly vehicles in the future. Compact hybrid cars of both types will be taxed at 18%.