GST Council Meet: Small Cars, Bikes To Become More Affordable? Here's What To Expect

GST Council Meet:  The 56th GST Council meeting will take place today in the national capital, Delhi. While the outcomes of the GST Council meeting are awaited, the Indian auto industry is expecting a reduction in taxes levied on smaller cars and two-wheelers in the country. Nirmala Sitharaman, the Union Finance Minister, will lead the meeting, which is scheduled to begin at 11:00 am today. Let’s take a look at what can be anticipated out of the 56th GST Council meeting for the automobile industry.

GST Council Meet: Current & Expected Rate

Prime Minister Narendra Modi announced a Diwali bonanza of GST reforms for the Indian Automotive sector during his speech on the 79th Independence Day. Currently, small cars (sub-4 metre) such as the Maruti Suzuki Swift, Hyundai Exter, Tata Tiago, Alto K10, and more, are taxed at 28 per cent. The industry is demanding a 10 per cent reduction in the GST rates, and the small cars and two-wheelers are anticipated to be taxed at 18 per cent.

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GST Council Meet: Who Will Benefit The Most?

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).