00:00Hi guys and welcome to DriveSpark and in today's news we are going to talk about the new GST slab
00:04that has just been set. Now small cars are set to become more affordable and there is other news as
00:10well. So let's begin this video and I will tell you everything you need to know about the new GST
00:14slab. The GST council has slashed rates on small cars, bikes up to 350cc and 3 wheelers to 18%
00:22from 28% and this is going to be effective from September 22nd 2025. This festive season
00:29reform promises cheaper rides, higher sales and renewed momentum for struggling auto sectors in
00:35the Indian market. The biggest winners of GST overall are the entry level vehicles. The council has
00:39slashed GST on small cars, bikes up to 350cc and 3 wheelers as I mentioned from 28% that was earlier
00:46to now 18%. This is a massive relief for the middle class buyers just ahead of the festive season. Now
00:53by small cars we mean petrol cars up to 1200cc and diesel cars up to 1500cc with a maximum length of
01:014 meters. This category which includes popular models like the Maruti Suzuki Desire and the Kia
01:06Cirrus falls entirely into the new 18% slab. The two wheelers like Royal Enfield Bullet and the
01:12Classic 350 along with commuter motorcycles and the 350cc segment also qualify for the reduced rate.
01:19Auto rickshaws to get the benefit making mass mobility a little more affordable. If we talk
01:25about hybrid cars that are under 4 meters and within the small engine limits also will join the 18% GST
01:32bracket. This makes model like the Nexon CNG and similar hybrid models a little more effective. However,
01:39larger hybrids exceeding 1200cc in petrol and 1500cc in diesel or which are longer than 4 meters in length
01:47will be shifted up to a higher 40% tax slab that is gonna be a little expensive on the pocket. Now
01:54this includes popular names like Maruti Grand Vitara, Toyota Innova Hycross and the new Maruti
01:59Victorious hybrid also. Essentially compact hybrids and full-size hybrid SUVs and sedans will also be
02:07taxed as per luxury on premium models as well. The GSC council has created a new 40% slab specially for
02:13luxury and high-end vehicles. Earlier these attracted up to 50% of tax including CES but now they fall under
02:21the flat 40% rate without additional CES included in them. This category includes cars that are longer
02:28than 4 meters as I mentioned and engine above 1200cc in petrol and 1500cc in diesel such as the Hyundai
02:35Accreta, the Kia Seltos, Tata Harrier, Mahindra XCV700 and Scorpio N. All of them are set to become
02:41slightly cheaper. The motorcycles above 350cc including the KTM Duke 390, Triumph Speed 400 also
02:48fall into this slab. For enthusiasts, this means that some relief on high-capacity bikes despite
02:54them being labelled as luxury goods. Buses, trucks and ambulances now face a flat 18% GST increase on the
03:02earlier 28%. This simplification makes commercial mobility a little more affordable particularly for
03:07the state transport and logistics operation. Auto parts too have been standardized under the 18% slab
03:14cutting through the earlier confusion of multiple HS code base rates. Now this will streamline the
03:20supply chain and reduce the classification disputes. Manufacturers and suppliers are expected to benefit
03:26from this uniformity. Now ultimately bringing down the operation cost in the industry. As far as
03:32electric vehicles are concerned, the council has decided to keep the GST on EVs unchanged at 5%.
03:39This applies to two-wheelers, three-wheelers, passenger vehicles, commuting and big cars as well.
03:44While rates remain attractive, no clarity has been given on luxury EVs. So that means especially those
03:50are priced above the Rs 40,000,000 mark. Brands like Mercedes, BMW and Tesla may still face some
03:56uncertainty on the taxation. Nevertheless, for the mass-market EVs from Tata and Mahindra,
04:02this unchanged rate ensures they remain the most affordable in their respective segments.
04:07This reduction from 28% to 18% translates to real savings. A small hatchback priced at Rs 6,000,000
04:13could now be nearly Rs 60,000,000 cheaper, making the car a little more accessible for first-time
04:19buyers. For two-wheeler buyers, commuter bikes and scooters, this will be a much-needed price
04:25correction. This is expected to give a strong push to rural and segment urban demand. Luxury and premium
04:31cars, while still taxed heavily, will also see a slight reduction since the CES has been eliminated
04:37and they will fall under the 40% of the tax slab. Now as I mentioned, all the GST changes will come into
04:43effect from September 22, 2025 this year. Just in time for the festive season, dealers have already
04:49expected demand to surge the customer hold-off purchases until the new tax slab has been applied.
04:56So yeah guys, this was the news and there is good news also as I mentioned that now
05:01small cars and affordable cars and bikes under 350cc will become really really affordable for the first
05:07time buyers. I hope you like this video. If you like to do give it a thumbs up, share and subscribe to
05:12all our social media channels and to keep watching such videos, please follow DriveSpark. I will see you
05:16in the next one.
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