From September 22, GST on small cars and mass commuter bikes drops to 18%, while larger motorcycles face a steep hike.
Finance Minister Nirmala Sitharaman has announced revised GST slabs at the 56th GST Council meeting, bringing relief for middle-class buyers. The new rates will be effective from September 22, 2025.
Small cars now at 18% GST
The tax rate on small cars has been cut from 28% to 18%. Models like the Maruti Suzuki Swift and Dzire could become cheaper by nearly ₹60,000. Cars under 4 metres with engines up to 1,200cc (petrol) or 1,500cc (diesel) qualify under this category.
Bikes below 350cc also at 18%
Motorcycles with engines of 350cc or less will now attract 18% GST instead of 28%. Popular models such as Hero Splendor, Bajaj Platina and Royal Enfield Bullet 350 will see a price drop.
Big bikes taxed at 40%
Motorcycles above 350cc will now be taxed at 40%. Earlier, they faced 28% GST plus a 3% cess. With the cess removed, the higher slab places them in the “sin goods” category, making superbikes and premium cruisers costlier.
EVs remain unchanged at 5%
Electric vehicles continue to attract just 5% GST, keeping the government’s push for green mobility intact. Both budget and luxury EVs benefit from this rate.
Relief for commercial vehicles
GST on buses, trucks, ambulances and three-wheelers has been reduced to 18% from 28%, aiming to lower transport and logistics costs.
Auto parts standardised at 18%
All auto components have been moved into the 18% bracket, simplifying compliance for manufacturers and suppliers.
