• By Pawan Mishra
  • Tue, 19 Aug 2025 12:07 PM (IST)
  • Source:JND

GST On Bikes And Cars:  The Indian Government is planning to reduce GST rates on two-wheelers and smaller cars by Diwali. As per a report by Reuters, the government may cut down the GST rates from 28 per cent on small cars and two-wheelers to 18 per cent. Additionally, the authorities have also recommended a maximum 5 per cent GST on Insurance premiums.

GST On Bikes And Cars: Industry Demands

The automotive industry of the country has been demanding a reduction in the GST rates applied to small cars and conventional motorcycles. The Society of Indian Automobile Manufacturers (SIAM) also appealed for slashed GST rates for conventional bikes, and it also recommended additional relief for upcoming flex-fuel and alternative fuel models. Leading two-wheeler and four-wheeler manufacturers have also hailed the move, and have been demanding a contraction in the GST rates for a long time.

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GST On Bikes And Cars: Initiative & Expectations

Prime Minister Narendra Modi mentioned the GST reforms in his Independence Day Speech, and said, ‘We are bringing the next generation of GST reforms, taxes needed by the common man will be reduced substantially’. However, he didn’t mention any specific sectors, but the ‘GST 2.0’ initiative is anticipated to exclude 12 per cent and 28 per cent slabs. The Initiative is also expected to simplify the slabs by focusing on a 5 per cent rate for essential services, and an 18 per cent rate for standard goods.

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GST On Bikes And Cars: Benefits

The small car segment holds a significant share of the Indian car market. Similarly, the commuter motorcycles and Scooters hold a significant share of the Indian two-wheeler market. The Indian government’s move to reduce GST rates on small cars and conventional two-wheelers is expected to benefit carmakers such as Maruti Suzuki, Hyundai and Tata, along with leading two-wheeler manufacturers like Hero Motocorp and Honda Motorcycles & Scooters India (HMSI).