GST Rate Cut to Boost Auto and Transport Sector: Affordable Vehicles, Job Growth Ahead

New Delhi: In a landmark decision during the 56th GST Council meeting chaired by the Union Finance Minister, the government approved significant GST rate reductions for the automobile and road transport sectors, effective September 22, 2025. Key changes include GST cut from 28% to 18% on two-wheelers, cars, buses, commercial vehicles, and auto components. Tractors will now attract only 5% GST, down from 12%.

Major Impacts:

• Lower prices for two-wheelers, small cars, tractors, and buses.

• Boost in demand across rural and urban markets.

• Stronger MSMEs and auto-component supply chains.

• Over 35 million jobs expected across manufacturing, sales, logistics, and services.

This move supports Make in India, clean mobility, and logistics cost reduction. It will also enhance export competitiveness, promote green transport, and simplify taxation with full ITC availability.

The GST revision is a key step toward making transport more affordable, efficient, and sustainable, benefiting both consumers and industry.